Question: We have a high deductible health plan (HDHP) with an imbedded deductible of $2,000 and a $4,000 maximum, meaning each person has to meet an individual deductible. Would an employee be able to contribute the single maximum to his or her health savings account (HSA) even though he or she has family coverage in this case?
Answer: An employee is eligible to contribute to a health savings account (HSA) if he or she meets all the following conditions:
- Has qualifying high deductible health plan (HDHP) coverage;
- Does not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
- Is not enrolled in Medicare; and
- Is not the tax dependent of another taxpayer.
Qualifying HDHP coverage (sometimes called an HSA-compatible plan) is a health plan with deductible and out-of-pocket amounts that meet IRS requirements. IRS regulations establish the HDHP’s minimum annual deductibles and maximum out-of-pocket limits. (Note that the deductible cannot be less than the minimum deductible amount, although it may be as high as the maximum out-of-pocket limit. In any case, in accordance with the Affordable Care Act (ACA), certain preventive care services must be covered at 100 percent without a deductible if the qualifying HDHP is a nongrandfathered plan.)
The 2015 rates for qualifying HDHPs (with comparison to 2014 figures) are as follows:
- Minimum annual deductible, self-only coverage — 2015: $1,300; 2014: $1,250.
- Minimum annual deductible, family coverage — 2015: $2,600; 2014: $2,500.
- Maximum out-of-pocket limit, self-only coverage — 2015: $6,450; 2014: $6,350.
- Maximum out-of-pocket limit, family coverage — 2015: $12,900; 2014: $12,700.
An employee will be enrolled either for “self-only” or “family” coverage; these terms refer to the type of coverage and not to two different deductibles under the same coverage. For instance, consider a 2015 qualifying HDHP using the minimum permissible deductibles ($1,300 or $2,600) with this example: If John enrolls himself without dependents in the HDHP, the coverage is self-only and the HDHP will begin paying benefits after John satisfies the $1,300 deductible. On the other hand, if John enrolls himself and his wife, the coverage is family and the HDHP will begin paying benefits after John or his wife, or both in combination, satisfy the $2,600 deductible. If John is enrolled in a family HDHP, the plan does not begin paying benefits after John incurs $1,300 in eligible expenses because the plan’s deductible is $2,600. (Again, certain preventive services are covered without a deductible under the ACA.)
Regarding your question, if the HDHP begins paying benefits for any family member (including the employee) after the person satisfies $2,000 of the annual deductible, the HDHP is not a qualifying HDHP. Taxpayers (employees) enrolled in non-qualifying HDHPs are not eligible to make HSA contributions (or to have employer HSA contributions made on their behalf).
For reference, below is an excerpt of pertinent text from IRS Publication 969 (Health Savings Accounts). (Note that the IRS uses 2012 dollar amounts in its example.)
Family plans that do not meet the high deductible rules. There are some family plans that have deductibles for both the family as a whole and for individual family members. Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. If either the deductible for the family as a whole or the deductible for an individual family member is below the minimum annual deductible for family coverage, the plan does not qualify as an HDHP.
Example: You have family health insurance coverage in 2012. The annual deductible for the family plan is $3,500. This plan also has an individual deductible of $1,500 for each family member. The plan does not qualify as an HDHP because the deductible for an individual family member is below the minimum annual deductible ($2,400) for family coverage.