HDHP/HSA Question

[JG EA]

Taxpayer had a HDHP last year and bought an HSA. He started the plan at the beginning of September and was able to contribute and deduct 4 months worth. The deductible last year was $1000. His deduction for the HSA was $333.

Now this year his plan is still a $1000 deductible, but the rules say it has to be $1050 to be a HDHP. Does that mean he cannot contribute to his HSA?

I called the insurance company and they said he needed to buy a plan that was "tied in" to an HSA account. There is nothing in the rules about having a specifically designated plan except that it be High Deductible.

Does anyone know if there is any provision of it being a HDHP went you start making it good enough to continue to qualify?

[Brad Imsdahl]

The minimum annual deductible for 2006 for a self-only plan is $1,050. For 2007, it is $1,100. Obviously these numbers will continue to climb. If the health plan is not tied to the HSA rules, it will eventually not qualify as a HDHP. That is why the insurance company says you need to get a plan that is tied to an HSA.

[JG EA]

Ok

Thanks, that's not what I wanted, but OK. I appreciate your help!

JG

[taxmandan]

HDHP plans

The insurance companies identify HDHP plans that qualify for HSA, not all high deductible plans qualify. And, he does not have to use their HSA savings account. The insurance companies will tie the HDHP to their savings bank if he lets them, but they usually have high fees and he can do better with a search online. There is one bank that offers a no fee HSA account and he can open it with a $25 deposit.