Personal Finance (Not Investing) • (Open Enrollment) Expecting Baby - Questions on Individual vs. Combined Healthcare Plans, HSA/FSA Contributions

Background: My wife and I are currently going through open enrollment. We have historically been on our own HDHP w/ HSA plans (my wife can’t be on my insurance per company policy and it is actually more cost effective for us to be on separate plans vs. both being together on hers) but we are expecting a child in June 2025 and therefore want to switch her plan. She is planning to enroll in her company’s PPO plan and wanted to contribute to an FSA, and I was going to stay on my own HDHP w/ HSA, but we learned she cannot contribute to an FSA if I am contributing to an HSA. Once we have 3 people total instead of 2, we will likely want to merge all of us onto her company’s PPO plan when our child is born (again, she cannot go on mine, so it makes the most sense to have us all on hers).

Questions:
1. Can/should I contribute half a year to my own individual HSA and then when our child is born, we all go onto/I switch to her PPO with an FSA at that time? Can we contribute the full $3,200 to the FSA at that time (say starting in July) or is it pro-rated?
2. Is contributing to my HSA for the first half of the year worth the hassle, or should she just do the FSA for the entire year and I forgo my HSA contributions? I think it’s somewhat likely that we use all of the $3,200 FSA funds, but the “use it or lose it” policy is a downside compared to the ability to rollover the HSA.
3. Anything else we should be aware of/missed?

Statistics: Posted by ForeverInvestorILL — Sun Oct 20, 2024 9:35 pm — Replies 0 — Views 60

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