HSA catchup amount. 1000 x1 or 1000 x2

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
User avatar
Topic Author
ram
Posts: 2281
Joined: Tue Jan 01, 2008 9:47 pm
Location: Midwest

HSA catchup amount. 1000 x1 or 1000 x2

Post by ram »

Husband and wife are both >=55 yrs old.
Husband has a family high deductible health plan (with appropriate deductibles) that covers both of them.
Both husband and wife have a HSA account with Fidelity.

What is the maximum amount that this family can contribute to a HSA in 2021?

a) He contributes 7200 +1000. She = 0. Total = 8200

b) He 7200 + 1000. She 1000. Total = 9200

added : I believe the answer is 9200. My employer does not agree. Does anybody have any links to data I can forward to my employer.
Last edited by ram on Mon Oct 11, 2021 8:59 pm, edited 2 times in total.
Ram
HomeStretch
Posts: 11420
Joined: Thu Dec 27, 2018 2:06 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by HomeStretch »

B) $9200.

The $1k HSA catch-up contribution at age 55+ must be deposited into each spouse’s HSA account. The $7200 can be allocated to either or both accounts.
User avatar
Topic Author
ram
Posts: 2281
Joined: Tue Jan 01, 2008 9:47 pm
Location: Midwest

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by ram »

HomeStretch wrote: Mon Oct 11, 2021 7:39 pm B) $9200.

The $1k HSA catch-up contribution at age 55+ must be deposited into each spouse’s HSA account. The $7200 can be allocated to either or both accounts.
Thanks Homestretch. Would you happen to have any references.
Ram
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by Soon2BXProgrammer »

ram wrote: Mon Oct 11, 2021 8:58 pm
HomeStretch wrote: Mon Oct 11, 2021 7:39 pm B) $9200.

The $1k HSA catch-up contribution at age 55+ must be deposited into each spouse’s HSA account. The $7200 can be allocated to either or both accounts.
Thanks Homestretch. Would you happen to have any references.
https://www.irs.gov/publications/p969

Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2020 is $7,100. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses’ Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division.

The rules for married people apply only if both spouses are eligible individuals.

If both spouses are 55 or older and not enrolled in Medicare, each spouse’s contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage can’t be more than $9,100. Each spouse must make the additional contribution to his or her own HSA.

Example. For 2020, spouses Ginger and Lucy are both eligible individuals. They each have family coverage under separate HDHPs. Ginger is 58 years old and Lucy is 53. Ginger and Lucy can split the family contribution limit ($7,100) equally or they can agree on a different division. If they split it equally, Ginger can contribute $4,550 to an HSA (one-half the maximum contribution for family coverage ($3,550) + $1,000 additional contribution) and Lucy can contribute $3,550 to an HSA.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
invest4
Posts: 1905
Joined: Wed Apr 24, 2019 2:19 am

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by invest4 »

Thanks for this...did not realize there was an HSA catch up at 55 (have been firmly focused on 50 which happens for us in 2022).
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by anon_investor »

ram wrote: Mon Oct 11, 2021 8:58 pm
HomeStretch wrote: Mon Oct 11, 2021 7:39 pm B) $9200.

The $1k HSA catch-up contribution at age 55+ must be deposited into each spouse’s HSA account. The $7200 can be allocated to either or both accounts.
Thanks Homestretch. Would you happen to have any references.
Basically you should contribute $8,200 (less any employer contributions) into your own HSA (via payroll if you can to avoid FICA tax); and your spouse needs to setup her own HSA to contribute $1,000.
HomeStretch
Posts: 11420
Joined: Thu Dec 27, 2018 2:06 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by HomeStretch »

If you will accumulate a significant HSA balance, it may make sense to direct a portion of the HSA contributions (in addition to spouse’s catch-up contribution, if any) to an HSA in spouse’s name if you/spouse plan to make HSA distributions for Medicare premiums. If your spouse is the older spouse, you are not allowed to pay spouse’s Medicare premiums income-tax-free from your HSA account until you are age 65.

If your spouse is the younger spouse and will remain enrolled in an HSA-eligible HDHP, spouse will need an HSA in spouse’s name to continue to make HSA contributions (subject to single individual contribution limits) after you enroll/are eligible for Medicare.

I can’t give you a reference for this. Medicare-HSA interactions are pieced together (by experts, which is not me) from regulations by the Dept of HSS (for Medicare) and the Treasury Dept (for HSAs). I don’t know if the two departments have issued combined guidance. Perhaps your HSA provider document has some information on this.
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by Soon2BXProgrammer »

ram wrote: Mon Oct 11, 2021 7:35 pm added : I believe the answer is 9200. My employer does not agree. Does anybody have any links to data I can forward to my employer.
see my above references...

but don't tell your employer what you are doing with your spouse's HSA. They have no business in that., and probably dont' have a clue.

just ask your employer to put in 8200 in your HSA via payroll.

Then you just manually deposit 1000 into your spouses HSA
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
User avatar
Topic Author
ram
Posts: 2281
Joined: Tue Jan 01, 2008 9:47 pm
Location: Midwest

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by ram »

Soon2BXProgrammer wrote: Tue Oct 12, 2021 7:39 am
ram wrote: Mon Oct 11, 2021 7:35 pm added : I believe the answer is 9200. My employer does not agree. Does anybody have any links to data I can forward to my employer.
see my above references...

but don't tell your employer what you are doing with your spouse's HSA. They have no business in that., and probably dont' have a clue.

just ask your employer to put in 8200 in your HSA via payroll.

Then you just manually deposit 1000 into your spouses HSA
That's the plan. Employer refused to deduct $1000 for HSA on her behalf.
Ram
User avatar
Topic Author
ram
Posts: 2281
Joined: Tue Jan 01, 2008 9:47 pm
Location: Midwest

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by ram »

anon_investor wrote: Tue Oct 12, 2021 4:56 am
ram wrote: Mon Oct 11, 2021 8:58 pm
HomeStretch wrote: Mon Oct 11, 2021 7:39 pm B) $9200.

The $1k HSA catch-up contribution at age 55+ must be deposited into each spouse’s HSA account. The $7200 can be allocated to either or both accounts.
Thanks Homestretch. Would you happen to have any references.
Basically you should contribute $8,200 (less any employer contributions) into your own HSA (via payroll if you can to avoid FICA tax); and your spouse needs to setup her own HSA to contribute $1,000.
Thanks. Will do.
Ram
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by Soon2BXProgrammer »

ram wrote: Mon Oct 18, 2021 8:46 pm
Soon2BXProgrammer wrote: Tue Oct 12, 2021 7:39 am
ram wrote: Mon Oct 11, 2021 7:35 pm added : I believe the answer is 9200. My employer does not agree. Does anybody have any links to data I can forward to my employer.
see my above references...

but don't tell your employer what you are doing with your spouse's HSA. They have no business in that., and probably dont' have a clue.

just ask your employer to put in 8200 in your HSA via payroll.

Then you just manually deposit 1000 into your spouses HSA
That's the plan. Employer refused to deduct $1000 for HSA on her behalf.
Your employer should refuse to deduct $1000 for her HSA, because you shouldn't get a FICA deduction for her contribution.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
User avatar
cflannagan
Posts: 1208
Joined: Sun Oct 21, 2007 11:44 am
Location: Working Remotely

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by cflannagan »

ram wrote: Mon Oct 18, 2021 8:46 pm That's the plan. Employer refused to deduct $1000 for HSA on her behalf.
Based on reading other replies above, it's not that employer is wrongly refusing (employer isn't), employer simply cannot, legally. They can only contribute HSA contributions in your name as an employee, including the $1,000 catchup contribution. Your spouse is entitled to $1k catchup contribution as well but not only does it have to be a contribution made to her HSA account, the contribution cannot be done through your employer either.

Not expert on HSA contribution policy but that's how I read it based on other replies (and a link to the IRS publication).
TropikThunder
Posts: 3918
Joined: Sun Apr 03, 2016 5:41 pm

Re: HSA catchup amount. 1000 x1 or 1000 x2

Post by TropikThunder »

ram wrote: Mon Oct 18, 2021 8:46 pm That's the plan. Employer refused to deduct $1000 for HSA on her behalf.

Of course they refused to put her $1,000 in your account. That’s because (emphasis added):
HomeStretch wrote: Mon Oct 11, 2021 7:39 pm
https://www.irs.gov/publications/p969
(snip)

Each spouse must make the additional contribution to his or her own HSA.
HSA’s are individual accounts, like IRA’s. There are no joint HSA’s.
Post Reply