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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4014
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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My wife and I work for the same employer. Our employer provides

Resolved Question:

My wife and I work for the same employer. Our employer provides each of us (separately) coverage by means of an High Deductible Health Plan ($5,000), which qualifies both of us for an Health Savings Account. I currently have an open HSA account. While my wife is listed as an additional signer on my plan and uses it for her prescriptions, she does not have an HSA of her own. For 2014 the maximum single contribution limit is $3,300 but the family limit is $6,550. I have a traditional IRA that I would like to use to contribute to my HSA. Since, as I understand it, I can only make one lifetime contribution from my IRA, I would like to make it as a family plan so that I can make the largest contribution. What would be the best way to do this? Thanks for your help.
Submitted: 11 months ago.
Category: Tax
Expert:  Lane replied 11 months ago.

Lane :

 


Hi,

Lane :


The IRA to HSA transaction must be done as a direct transfer. That means the IRA assets must move directly to the
HSA and cannot be paid to the IRA owner. A common approach is for you to request and complete a “transfer form”
from your HSA provider. The HSA provider forwards the form to the IRA provider. The IRA provider then writes a
check directly to the HSA provider for the benefit of the HSA owner and sends the check directly to the HSA provider.
The rules permit the IRA/HSA owner to hand carry a check made payable to the HSA custodian or trustee.

Lane :

Also note that this is not tax deductible but ISD subject to the limits

Lane :

sorry fot the typo ..."IS" subject to the annual limit

Customer:

That part I understand. My Question is, how can I make this contribution at the higher family level if I am the owner of the HSA. Or, how can I make my HSA a family HSA?

Lane :

You'll have to talk to the provider (custodian, the bank or brokerage platform where your plan is now) ... SOme custodian will allow for an amendment, and some will have you simply open a family plan account with a different number

Lane :

once ou have that account open you simply do the trustee to trustee transfer (be sure not to take constructive receipt)

Customer:

OK. So to be sure that I am clear, my HSA custodian must either allow me to amend my existing HSA to a family plan, or open a new family HSA?

Lane :

Your custodian (FOR THE HSA) will have the transfer paperwork ... they are the onse that start the process (Veru mich like rolling the IRA to a different IRA provider) ... the receiving provider send the request to the IRA provider

Lane :

On your question, yes, that's correct

Lane :

You could even open a family plan somewhere else... as long as you qualify because of the health plan at work

Customer:

OK, that is helpful.

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4014
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Expert:  Lane replied 11 months ago.

Thanks Steve,

Let me know if I can help further.

DO be sure to tell the new account holder that you want this does as a trustee to trustee (sometimes called custodial) transfer.

You don't want a check...

Thanks again,
Lane

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