2011 HSA INsurance coverage

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2011 HSA INsurance coverage

Postby justinbiz72 » Tue Nov 02, 2010 8:38 am

My decree states that I keep insurance coverage for my 2 boys. I have coverage for them through my company and have an HSA plan. I just received information from my company stating changes for 2011 in regards to the HSA program. The change states that in order to use the funds in the HSA for my boys I have to either claim them on my taxes or support them more than 50%. Currently my ex claims them on her taxes and they spend more than 50% of the time with her. I have standard < parenting time > rights in Texas. Is there some kind of exception for divorced dads so I can use my HSA funds to pay for their medical costs?
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Re: 2011 HSA INsurance coverage

Postby kmich91262 » Tue Nov 02, 2010 11:20 am

Not that I'm aware of. HSAs have to follow in this case the IRS pub 501. In pub 501 the only way you can claim medical costs for your dependents is if you have them the majority of the overnights in a calendar year and then at that point you can claim dependar care expenses (i.e. day care), EIC (if qualified), medical costs for them, and file as head of household. So although you might be able to claim them for tax purposes as an exemption, if you don't have them the majority of the overnights in a calendar year, unfortunately you will be SOL. The key is having them 183 overnights or more in a calendar year.
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Re: 2011 HSA INsurance coverage

Postby hoosier_dad » Tue Nov 02, 2010 11:56 am

Interesting language from Pub 969:

Qualified medical expenses are those incurred by the following persons.
You and your spouse.

All dependents you claim on your tax return.

Any person you could have claimed as a dependent on your return except that:

The person filed a joint return,

The person had gross income of $3,650 or more, or

You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2009 return.


For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption.

Doesn't this little disclaimer at the end make the dependent requirement moot for divorced parents?
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Re: 2011 HSA INsurance coverage

Postby kmich91262 » Tue Nov 02, 2010 12:42 pm

ok...my bad. Re-reading page 14, far right column of publication 501 lists everything except for medical expenses. So hoosier maybe right in this case.
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Re: 2011 HSA INsurance coverage

Postby hoosier_dad » Tue Nov 02, 2010 2:04 pm

Form 8889 is required to be completed if you have an HSA and it has the same language in the 2009 form, Line 15:

http://www.irs.gov/pub/irs-pdf/i8889.pdf

Big question is whether Health Care Reform changed this definition.
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Re: 2011 HSA INsurance coverage

Postby justinbiz72 » Wed Nov 03, 2010 8:10 am

Thanks for the replies. Good stuff. I also sent an email question to one of the attorneys on this site. Hopefully they will have an up to date answer in regards to the new Health care situation.
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Re: 2011 HSA INsurance coverage

Postby hoosier_dad » Wed Nov 03, 2010 8:31 am

One confusing point is that it appears individual employer plans can further limit the definition of a dependent for HSAs, so all the text I found from the IRS might still be overriden by an individual HSA plan's terms. Please post back on what you find, I'm in an HSA with 3 kids and am very interested.
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Re: 2011 HSA INsurance coverage

Postby justinbiz72 » Wed Nov 03, 2010 9:20 am

I called my insurance company and asked about it and they told me to call the IRS. That is when I started looking for forums in regards to this subject. I have not called the IRS yet because I know I would be put on hold forever and who knows what type of answer I would get. Hopefully the attorney will post an up to date answer as I need to sign up for my insurance by November 17th.
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Re: 2011 HSA INsurance coverage

Postby chezfinz » Wed Nov 03, 2010 9:57 am

I just called the IRS this morning for a question on a 1099C due to a short sale on a house - waited less than 5 minutes and they were *extremely* helpful. You should give it a shot!

Your post made me curious about my own plan. Looked online and didn't see *anything* related to which dependents qualify or not; therefore my assumption is that *any* dependent qualified to be covered by the plan, is qualified to be covered by the HSA as well. They specifically list "stepchildren" as a qualifying dependent, with no stipulations on who claims them on taxes or who has them the higher percentage of time during the year.
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Re: 2011 HSA INsurance coverage

Postby justinbiz72 » Wed Nov 03, 2010 11:19 am

Chezfinz- I went ahead and called, you were right!!
So I spoke to someone at the IRS in regards to HSA and who is eligible. They stated that line 15 of form 8889 has not changed and that my children would be eligible and I can use HSA funds to pay for their medical expenses. That is a relief!!
Thanks everyone for your responses and help. I hope this thread helps others.
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