Author Topic: Stupid HSA HDHP Question  (Read 3943 times)

Malum Prohibitum

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Stupid HSA HDHP Question
« on: December 12, 2015, 11:21:21 AM »
I do not have employer sponsored group health insurance.  I am self employed.  It is time to select insurance for 2016.  I have been "told" that an insurance policy must have "HSA" in the title to be HSA eligible.  I think this is a bunch of BS.

The qualifications are:

Minimum deductible 1300/2600 self/family
Maximum Out of Pocket 6550/13,100

So long as it meets the criteria listed above, then I can contribute to my HSA account, right?  Lots of "bronze" plans appear to qualify as a HDHP.

Am I missing something simple here?

MDM

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Re: Stupid HSA HDHP Question
« Reply #1 on: December 12, 2015, 12:23:18 PM »
I think this is a bunch of BS.
Your BS detector is working well, and you seem up to date on the 2016 dollar requirements for an HDHP.  Getting the HDHP part right is necessary (and usually the major hurdle), but not sufficient for you to deduct your HSA contributions.

The rest of the story is in https://www.irs.gov/publications/p969/ar02.html#en_US_2014_publink1000204025,
with numbers updated for 2016 in https://www.irs.gov/pub/irs-drop/rp-15-30.pdf

Malum Prohibitum

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Re: Stupid HSA HDHP Question
« Reply #2 on: December 12, 2015, 01:19:42 PM »
Thanks, MDM.  I am reading that link.  It appears a great many plans qualify that are not called "HSA" in the title.

jorjor

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Re: Stupid HSA HDHP Question
« Reply #3 on: December 12, 2015, 01:25:12 PM »
I do not have employer sponsored group health insurance.  I am self employed.  It is time to select insurance for 2016.  I have been "told" that an insurance policy must have "HSA" in the title to be HSA eligible.  I think this is a bunch of BS.

You are correct.


The qualifications are:

Minimum deductible 1300/2600 self/family
Maximum Out of Pocket 6550/13,100

So long as it meets the criteria listed above, then I can contribute to my HSA account, right?  Lots of "bronze" plans appear to qualify as a HDHP.

Am I missing something simple here?

That is NOT correct. Meeting the dollar limits is necessary, but not sufficient for "HSA-ness." The plan must also have all services subject to the deductible, except for defined preventive care. PCP visits subject to a copay instead of the deductible? Not HSA eligible. Prescription drugs subject to a copay? Not HSA eligible. In my experience most bronze plans you find on the Exchange that meet the deductible/OOP limits aren't HSA eligible because of this requirement.
« Last Edit: December 12, 2015, 01:37:35 PM by jorjor »

jorjor

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Re: Stupid HSA HDHP Question
« Reply #4 on: December 12, 2015, 01:26:46 PM »
I went back to an old post from another thread and found some links that mention the first-dollar coverage requirement.

http://www.bcbsil.com/country/hsa_qualifies.htm

http://www.hsaconnect.com/hsa-health-insurance/hsa.php

Altons Bobs

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Re: Stupid HSA HDHP Question
« Reply #5 on: December 12, 2015, 04:14:37 PM »
A plan is classified as an HDHP by the state Department of Insurance, not by you personally. The insurance carrier has to send in their plan request to the state for approval for it to become an HDHP/HSA compatible plan.  You can't just randomly say a plan is HSA/HDHP just because you think it is.  There are tons of plans that you pay into deductible first before plan starts paying for anything, and they are not HDHP.  You have to find out from your insurance company if the plan you're on is an HSA compatible/HDHP if what you have from them is not clear to you.

GrOW

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Re: Stupid HSA HDHP Question
« Reply #6 on: December 12, 2015, 05:21:54 PM »
This is a problem that HSA administrators are trying hard to solve. They obviously do not have influence over the misguided plan titles used by the insurance companies.

Make sure your plan qualifies for an HSA per IRS guidelines and ignore the plan name.

pawsforlunch

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Re: Stupid HSA HDHP Question
« Reply #7 on: December 12, 2015, 09:20:41 PM »
I have what is also probably a stupid question. Also self employed. I have a HDHP and have been told that it is HSA eligible. The insurance provider gave me  a number to setup my HSA. Am I required to use the provider they supplied or can I choose my own? The telephone support person was adamant that I was required to use their provider but I can't find this explained on their site. Insurance provider is Anthem.

MDM

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Re: Stupid HSA HDHP Question
« Reply #8 on: December 12, 2015, 10:26:14 PM »
Am I required to use the provider they supplied or can I choose my own?
If your HSA money is coming pre-tax from your wages, your employer may dictate where the money goes first.  After that you may move it to whichever HSA provider you choose.  If you are funding your HSA with post-tax money (and will then get the tax deduction when you file), you may put the money directly into whichever HSA provider you choose.

See  http://forum.mrmoneymustache.com/taxes/good-hsa-providers/ and
http://thefinancebuff.com/how-to-rollover-an-hsa-on-your-own-and-avoid-trustee-transfer-fee.html.

maizeman

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Re: Stupid HSA HDHP Question
« Reply #9 on: December 12, 2015, 11:48:29 PM »
I had the same question (and started the thread jorjor is probably referring to). It's surprisingly hard to find the information on google and I ran into a lot of those same links which only talked about the requirements for the deductibles and out of pocket maximums.

The thing that appears to run my plan out is that, even though the deductible is high enough and the out of pocket maximum is low enough, they cover prescriptions with a co-pay instead of having me pay out of pocket until I reach my deductible. So it's not HSA compatible....even though I'd happily sacrifice a drug benefit I haven't had a reason to use since 2011 for access to an HSA account each year.

pawsforlunch

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Re: Stupid HSA HDHP Question
« Reply #10 on: December 13, 2015, 07:42:55 AM »
Am I required to use the provider they supplied or can I choose my own?
If your HSA money is coming pre-tax from your wages, your employer may dictate where the money goes first.  After that you may move it to whichever HSA provider you choose.  If you are funding your HSA with post-tax money (and will then get the tax deduction when you file), you may put the money directly into whichever HSA provider you choose.

See  http://forum.mrmoneymustache.com/taxes/good-hsa-providers/ and
http://thefinancebuff.com/how-to-rollover-an-hsa-on-your-own-and-avoid-trustee-transfer-fee.html.

Thank you! I am funding with post-tax money and I thought that was the case but the Anthem representative was insistent that I needed to use mybenefitwallet.com. This forum is always so helpful!

Malum Prohibitum

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Re: Stupid HSA HDHP Question
« Reply #11 on: December 13, 2015, 05:11:35 PM »
That is NOT correct. Meeting the dollar limits is necessary, but not sufficient for "HSA-ness." The plan must also have all services subject to the deductible, except for defined preventive care. PCP visits subject to a copay instead of the deductible? Not HSA eligible. Prescription drugs subject to a copay? Not HSA eligible. In my experience most bronze plans you find on the Exchange that meet the deductible/OOP limits aren't HSA eligible because of this requirement.
  Thanks for adding this.  Hours and hours of searching, and I did not uncover this.