HSA Frequently Asked Questions (FAQ)

B. Eligibility

1. Who is eligible for this plan?

In order to be an eligible individual and qualify for tax-free contributions to an HSA, you must meet the following requirements:

  • You must be covered under a high deductible health plan (HDHP),
  • You must have no other medical coverage (see next section for details).
  • You must not be enrolled in Medicare.
  • You must not be claimed as a dependent on someone else’s tax return.
  • You must have a valid Social Security Number.

2. What is the "No Other Medical Coverage" requirement?

In order to be eligible for tax-free contributions into an HSA, the IRS requires that you have no other medical coverage other than an IRS-qualified high deductible health plan. You are disqualified for tax-free contributions if:

  • You are enrolled in a federal government plan like Medicare A, B, or D, or Tricare (if you have VA benefits, receiving preventive care services or treatment for a service-related disability from the VA does not disqualify an individual from participating in an HSA);
  • Your spouse covers you on an IU plan or another employer’s medical plan unless it is also a high deductible plan;
  • Your spouse has a Health Reimbursement Account (HRA) or flexible spending account (FSA) or IU’s TSB Healthcare Savings account that is unrestricted, and the account could be used to cover your HDHP deductible.

You are still eligible to put tax-free contributions into your HSA if your spouse has other medical coverage. However, you cannot be covered on his/her non-HDHP medical plan or his/her HRA/FSA/TSB plan and still be eligible to make tax-free contributions to your HSA account.

If you are ineligible to make tax-free contributions, you can waive the HSA and still elect to be enrolled in an HDHP plan.

If you are ineligible to make tax-free contributions and still elect the HSA, you are responsible for reporting the ineligible HSA contributions on your annual tax return as taxable income. Consulting a tax advisor about reporting ineligible contributions is advised.

3. Am I eligible for these plans if I am here on a J-1 Visa?

No. According to the U.S. Department of State, all J-1 Visa holders must have health insurance; however, the insurance policy cannot have a deductible that exceeds $500. J-1 Visa holders are eligible for the Anthem PPO $500 Deductible plan.

4. Can I enroll in an HSA if I have other insurance that pays medical expenses?

Yes and No. You cannot be covered, as an employee or as a dependent, under any other plans that can cover the expenses you incur to meet your HDHP deductible and still be eligible to make Health Savings Account contributions on a tax-free basis.

You are disqualified for tax-free contributions if:

  • You are enrolled in a federal government plan like Medicare A, B, or D, or Tricare (if you have VA benefits, receiving preventive care services or treatment for a service-related disability from the VA does not disqualify an individual from participating in an HSA);
  • Your spouse covers you on an IU plan or another employer’s medical plan unless it is also a high deductible plan;
  • Your spouse has a Health Reimbursement Account (HRA) or flexible spending account (FSA) or IU’s TSB Healthcare Spending account that is unrestricted, and the account could be used to cover your HDHP deductible.

However, you may have automobile, dental, vision, disability and long-term care insurance at the same time as an HDHP, and coverage for a specific disease (e.g., a cancer policy) or illness, as long as it pays a specific dollar amount when the policy is triggered.

5. My spouse has a flexible spending account (FSA, like the IU TSB plan) or HRA through her/his employer. Can I enroll in the HSA?

You can enroll in the HDHP medical, however, according to the IRS, you cannot contribute tax-free dollars to an HSA if your spouse’s FSA, HRA or their IU TSB Healthcare Spending account can pay for any of your medical expenses before your HDHP deductible is met. Please note that unless your spouse’s FSA agreement specifically states it does not cover you, you are not eligible to make tax-free contributions to an HSA plan.

6. If both spouses are enrolled in an HDHP, are both spouses eligible for an HSA? How much can each spouse contribute?

If you and your spouse are each enrolled in Employee-only HDHP coverage, each of you are subject to the Employee-only HSA limit ($3,600 each). If either you or your spouse has ‘family’ HDHP coverage (Employee with Children or Family coverage), then as a couple you will be subject to the family contribution limit ($7,200). This means that if either you or your spouse cover family members on your HDHP, your combined HSA contribution limit is the annual maximum for family coverage ($7,200).

Those turning age 55 or older during the year may contribute up to an additional $1,000 each year to the HSA (make a "catch-up contribution"). You and your spouse can each make the $1,000 catch-up contribution, but you must deposit the funds into separate accounts. This means that in order for both you and your spouse to elect the catch-up, you must enroll in separate medical plans.

The following examples describe how much can be contributed under varying circumstances. Assume that neither spouse qualifies for "catch-up contributions."

When a spouse has an HDHP with another employer or enrolls separately from their spouse, the university will not be able to assist in limiting contributions to statutory maximums. If an employee or their spouse exceeds statutory maximums, he or she is responsible for taking corrective actions and responsible for any tax consequences.

Example 1: Jan, an IU employee, is enrolled in the Anthem PPO HDHP. She covers her spouse, Mike, on her plan.

  • Jan has no other coverage.
  • Mike has additional self-only coverage through his employer which has a deductible less than $1,400. Since he has coverage that does not qualify as an HDHP, he is not eligible to contribute to an HSA in his name.
  • Jan may contribute $7,200 to an HSA in her name because she covers one or more individuals on her plan, therefore qualifies for the family maximum.

Example 2: Dave, an IU employee, is enrolled in the IU Health HDHP. He covers his spouse, Ellen, on his plan.

  • Dave has no other coverage.
  • Ellen has additional self-only HDHP coverage through her employer which has a deductible greater than $1,400.
  • Both Dave and Ellen are eligible to have and to contribute to their own HSA. However, because they are married, they are only eligible to contribute up to the combined family maximum of $7,200 between both accounts.  

Example 3: John, an IU employee, is enrolled in the Anthem PPO HDHP. He covers his spouse, Charlie, on his plan.

  • John has no other coverage.
  • Charlie has additional employee & child(ren) HDHP coverage with a deductible greater than $2,800.
  • Both John and Charlie are eligible to have and to contribute to their own HSA. However, because they are married, they are only eligible to contribute up to the combined family maximum of $7,200 between both accounts.  

Example 4: Sam, an IU employee, is enrolled in the IU Health HDHP. He covers his spouse, Anne, on his plan.

  • Sam and Anne also have family coverage with a $200 deductible through Anne’s employer plan.
  • Sam and Anne are treated as having family coverage with the lower annual deductible ($200). The $200 deductible does not meet the IRS minimum requirements of an HDHP, thus neither Sam nor Anne are eligible for and neither may contribute to an HSA.

Example 5: Mary, an IU employee, is enrolled in the IU Health HDHP. She covers her spouse, Julie, on her plan.

  • Mary has no other coverage. Mary may contribute $7,200 to an HSA in her name because she covers one or more individuals on her plan, therefore qualifies for the family maximum.
  • Julie is also enrolled in Medicare. Julie is not eligible and cannot contribute to an HSA.

Example 6: Martin and Jean are married and both work for IU. They are each enrolled in employee-only Anthem PPO HDHP coverage.

  • Martin has no other coverage. Martin can contribute $3,600 (the individual maximum) to his HSA.
  • Jean has no other coverage. Jean can also contribute $3,600 (the individual maximum) to her HSA.
  • Each is only eligible to contribute up to the individual lRS limit because they each only cover themselves.

Example 7: Samantha and Gary are married and both work for IU. Samantha is enrolled in employee & child(ren) IU Health HDHP coverage. Gary is enrolled in employee-only Anthem PPO HDHP coverage.

  • Samantha has no other coverage.
  • Gary has no other coverage.
  • Both Samantha and Gary are eligible to have and contribute to their own HSA. However, because they are married, they are only eligible to contribute up to the combined family maximum of $7,200 between both accounts.

HSA maximums are the combined total of employer contributions, employee’s contributions to their own HSA, spouse’s contributions to their own HSA (if applicable), and contributions made to an Archer MSA (if applicable).

These maximums can further be affected by the number of months you are covered under an HDHP less than a full year or when the employee or their spouse experiences a life event that results in a change in coverage levels mid-year. Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF).

7. What are my contribution limits if I and/or my spouse are age 55+?

If you and your spouse are each enrolled in Employee-only HDHP coverage, each of you are subject to the Employee-only HSA limit ($3,600 each). If either you or your spouse has ‘family’ HDHP coverage (Employee with Children or Family coverage), then as a couple you will be subject to the family contribution limit ($7,200). This means that if either you or your spouse cover family members on your HDHP, your combined HSA contribution limit is the annual maximum for family coverage ($7,200).

Those turning age 55 or older during the year may contribute up to an additional $1,000 each year to the HSA (make a "catch-up contribution"). You and your spouse can each make the $1,000 catch-up contribution, but you must deposit the funds into separate accounts. This means that in order for both you and your spouse to elect the catch-up, you must enroll in separate medical plans.

When a spouse has an HDHP with another employer or spouses enroll separately from one another, the university will not be able to assist in limiting contributions to statutory maximums. If an employee or their spouse exceeds statutory maximums, he or she is responsible for taking corrective actions and are responsible for any tax consequences.

Example 1: Joan, age 56, and Michael, age 60, are married. Both are enrolled in the Anthem PPO HDHP with employee-only coverage and each has their own HSA.

  • Joan and Michael are each eligible to contribute the individual IRS limit of $3,600 to their individual HSA.
  • Joan can also contribute an additional $1,000 to her HSA.
  • Michael can also contribute an additional $1,000 to his HSA.

Example 2: Jeremiah, age 60, and Michelle, age 52, are married IU employees. Jeremiah has IU Health HDHP employee and child(ren) coverage. Michelle has IU Health HDHP employee-only coverage. Each has their own HSA.

  • Because Jeremiah covers one or more individuals, they are both treated as having family coverage for purposes of determining the annual IRS maximum contribution limit.
  • Jeremiah and Michelle can contribute up to the combined family maximum of $7,200 between both accounts.
  • Because Jeremiah is over age 55, he can contribute an additional $1,000 to his HSA.

Example 3: Thomas, age 60, and Isabel, age 55, are married IU employees. Thomas covers them under Anthem PPO HDHP employee/spouse coverage. Thomas has an HSA. Isabel has no other coverage, therefore is not eligible for an HSA.

  • Thomas can contribute up to the family maximum of $7,200 to his HSA because he covers one or more family members on his plan.
  • Because Thomas is over age 55, he can also contribute an additional $1,000 to his HSA.
  • Even though Isabel is over age 55, Thomas cannot contribute an additional $1,000 to his HSA on her behalf because Isabel does not own the account.

HSA maximums are the combined total of employer contributions, employee’s contributions to their own HSA, spouse’s contributions to their own HSA (if applicable), and contributions made to an Archer MSA (if applicable).

The maximums can further be affected by the number of months you are covered under an HDHP when less than a full year or when the employee or their spouse experience a life event that results in a change in coverage levels mid-year. Details on the calculation of the IRS prorated maximum can be found in IRS publication 969 (PDF).

8. What if I am only eligible part of the year?

If this is your first year of coverage under a HDHP and you start mid-year, you can contribute up to the full applicable federal limit; including a full catch-up amount if age 55 or greater, so long as you start your HDHP coverage no later than December 1 of that year. In this case; however, you will be subject to a testing period. The testing period requires that you maintain HSA eligibility for a period beginning on December 1 of the year you started and ending on December 31 of the next year.

If this is not your first year of the HSA and you stop your HSA eligibility mid-year, you are only allowed to contribute 1/12 of the applicable federal limit times the number of months you were eligible.

9. I am currently enrolled in an HDHP and HSA, but plan to leave the university. Can I continue the HDHP and HSA after I have separated from the university?

Yes, you may retain enrollment in the plan for up to 18 months through COBRA continuation coverage. The University will no longer make contributions to your Health Savings Account via pre-tax payroll deductions, but as long as you are enrolled in a HDHP, you are still allowed to put contributions into your Health Savings Account up to the IRS allowed maximum. Any contributions put in your account on an after-tax basis are eligible to be deducted from your gross taxable income on your tax return. 

10. Can I use the money in my HSA to pay for health care for a family member?

Yes, you may use your HSA funds to pay for the qualified health expenses of you, your spouse* or a dependent without tax penalty even if they are covered under another health plan. 

*A spouse means one by marriage, either opposite-sex or same-sex, legally entered into in one of the 50 states, the district of Columbia, or a U.S. Territory or a foreign county.

The healthcare reform law has made it possible for parents to keep children through age 25 on their health plans – even those who are married and living away from home. TSB funds can be used for the healthcare expenses for these children, even if they are not covered on your medical plan. However, HSA funds can only be used tax-free on family members who qualify as IRS-defined tax dependents.

11. Who qualifies as a dependent?

A person generally qualifies as your dependent for HSA purposes if you claim them as an exemption on your Federal tax return.  Please see IRS Publication 502 for exceptions.

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