Our client’s employee’s spouse is coming off her medical plan, which means her HSA will change from Employee + Spouse to Employee Only. Because the spouse is on her medical plan, the employee has exceeded the HSA single coverage amount. Does this mean we must correct her HSA amount and reimburse her any funds that are over the single coverage amount?
HSA contribution limits are calculated on a monthly basis and based on the individual’s coverage status as of the first day of each month. For example, if an individual had family HDHP coverage through August 2022 and changed to single HDHP coverage mid-September 2022, the annual 2022 HSA contribution limit would be:
9/12 x $7,300 (the family limit) + 3/12 x $3,650 (the single limit) = $6,387.50.
If contributions have already exceeded this this amount, the employee should stop contributing and request an excess contribution distribution before the income tax filing deadline for the 2022 tax year.