Author Topic: HSA says I can contribute the family amount even though I'm single?  (Read 1478 times)

myTwelfAccount

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My HSA is run through Optum.  Optum tells me I can contribute 6900 to my HSA for 2018, the family amount.  But I am paying for single coverage through my health insurance (double checked).  I'm not married and don't have kids.  My 401K plan isn't that great and I've already contributed to my IRA for the year so I'm tempted to max out my HSA at 6900.  Is it worth the risk?  What kind of penalties could I face? 

Paul der Krake

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Re: HSA says I can contribute the family amount even though I'm single?
« Reply #1 on: January 21, 2018, 06:27:16 PM »
That's tax fraud. Tax fraud is bad, don't do it.

The support person probably misunderstood your situation.

the_grillman

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Re: HSA says I can contribute the family amount even though I'm single?
« Reply #2 on: January 21, 2018, 07:48:57 PM »
My HSA at 'major bank' after a system 'upgrade' also claims the same thing, for not only 2018 but all previous years.  Evidently it is wrong (even though they have me as single and 0 dependents).  I don't contribute more than the single amount and suggest you don't either but won't preach.

If you choose to do so anyways:
"Generally, you must pay a 6% excise tax on excess contributions. See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. The excise tax applies to each tax year the excess contribution remains in the account."

See IRS Publication 969.
« Last Edit: January 21, 2018, 07:53:11 PM by the_grillman »

alanB

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Re: HSA says I can contribute the family amount even though I'm single?
« Reply #3 on: January 22, 2018, 09:12:56 AM »
Theoretically, there is no limit on the amount you could contribute, since you could open multiple HSA accounts outside of your workplace and max them all out.  Or you could max your current account, move jobs halfway through the year and max out your new account too.  Hey, then you could double-max your 401K too while you are at it!

Yea, no, please do not do any of those things, the IRS doesn't like it.

teen persuasion

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Re: HSA says I can contribute the family amount even though I'm single?
« Reply #4 on: January 22, 2018, 06:55:29 PM »
If you are on a single plan, yeah, you can only contribute to the single limit.

However, if you are under 26 and on a parent's family plan, but not their dependent, you can open your own HSA and contribute to the family limit.  Since you are not their dependent, your parents cannot use $$ from their family HSA to pay for your medical expenses, you need your own HSA.  Part of a family HDHP = family HSA limits.  I've got 2 kids currently in this situation.

Sean Og

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Re: HSA says I can contribute the family amount even though I'm single?
« Reply #5 on: January 22, 2018, 09:26:54 PM »
Noticed the same last year on the Optum site. Yeah...dont do it :-)

On my company benefits election side it did have the correct limit for single and thus would prevent over contributing.

With This Herring

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Re: HSA says I can contribute the family amount even though I'm single?
« Reply #6 on: January 22, 2018, 10:50:32 PM »
My HSA is run through Optum.  Optum tells me I can contribute 6900 to my HSA for 2018, the family amount.  But I am paying for single coverage through my health insurance (double checked).  I'm not married and don't have kids.  My 401K plan isn't that great and I've already contributed to my IRA for the year so I'm tempted to max out my HSA at 6900.  Is it worth the risk?  What kind of penalties could I face?

Your HSA provider has no idea what your health insurance situation is unless you tell them.  They are telling you "hey you could possibly put in up to this much maybe if your situation is the most common one!" but they don't know.  Call Optum, tell them you're single for HSA purposes, and they should be able to fix the limit that shows up in your profile.  That's what I had to do with HSA Bank.

Do NOT over-contribute.  You will get penalized for every year the over-contribution stays there (as the_grillman says) and it will make your tax returns a mess (and also the backend records a mess when an Optum support person helps you with something down the line).  If the IRS comes to visit, you really don't want to say to them "I did it wrong on purpose, teehee!"