Just realized that we may have an HSA over contribution situation for 2024.
We began the year with two individual HSA accounts, then switched to one family account due to change of job in April/May.
Spouse A left job April 30 with individual HD health plan and individual HSA with paycheck contributions. Made additional contributions to a Fidelity Investments HSA plan, because the paycheck contributions were below the limits for the year, pro-rated for those first 4 months of 2024. Also rolled over the entire HSA balance in the employer's HSA provider to Fidelity too. All of Spouse A's HSA are now at Fidelity.
In May, Spouse B changed health care plan from individual HD health plan to joint health plan as Spouse A left job. Spouse B's HSA settings were set to max contributions both for the individual period (Jan-April) and joint period (May-Dec). Bad assumption was that the max would be pro rata for the joint eight month portion of the year ($5600). But have since noticed that the 2024 paycheck contributions for Spouse B are approaching $8300 and will be darn close by end of month.
The solution should be to remove all of Spouse A's contributions for the year, both the paycheck contributions and the additional contributions. The latter should be easy with Fidelity. But the paycheck contributions were made to the employer HSA provider, then later rolled over to Fidelity. Before we call Fidelity next week, has anyone been through this? Any traps to look out for or questions to ask Fidelity? Since we only had joint HD plan/ HSA for 8 months of year, not sure why it was trying to max out to $8400 instead of $5600 after May 1.
But maybe that is not right either, since I'm not sure all of the contributions are allowed into Spouse B's HSA since both spouses were individual for four months. In that case, Spouse B needs to remove the over contributions?
I assume that Fidelity treated the roll over as a roll over and not an improper contribution, but need to verify that too while we are at it.
What a hassle, but glad we figured this out in 2024.
We began the year with two individual HSA accounts, then switched to one family account due to change of job in April/May.
Spouse A left job April 30 with individual HD health plan and individual HSA with paycheck contributions. Made additional contributions to a Fidelity Investments HSA plan, because the paycheck contributions were below the limits for the year, pro-rated for those first 4 months of 2024. Also rolled over the entire HSA balance in the employer's HSA provider to Fidelity too. All of Spouse A's HSA are now at Fidelity.
In May, Spouse B changed health care plan from individual HD health plan to joint health plan as Spouse A left job. Spouse B's HSA settings were set to max contributions both for the individual period (Jan-April) and joint period (May-Dec). Bad assumption was that the max would be pro rata for the joint eight month portion of the year ($5600). But have since noticed that the 2024 paycheck contributions for Spouse B are approaching $8300 and will be darn close by end of month.
The solution should be to remove all of Spouse A's contributions for the year, both the paycheck contributions and the additional contributions. The latter should be easy with Fidelity. But the paycheck contributions were made to the employer HSA provider, then later rolled over to Fidelity. Before we call Fidelity next week, has anyone been through this? Any traps to look out for or questions to ask Fidelity? Since we only had joint HD plan/ HSA for 8 months of year, not sure why it was trying to max out to $8400 instead of $5600 after May 1.
But maybe that is not right either, since I'm not sure all of the contributions are allowed into Spouse B's HSA since both spouses were individual for four months. In that case, Spouse B needs to remove the over contributions?
I assume that Fidelity treated the roll over as a roll over and not an improper contribution, but need to verify that too while we are at it.
What a hassle, but glad we figured this out in 2024.
Statistics: Posted by criticalmass — Sun Dec 08, 2024 1:11 am — Replies 1 — Views 132