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HSA premium pass-through and form 8889

Forum|Forum|6 years ago
June 6, 2019
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Wondering if anyone would know this. I have an HSA and my health plan contributes a "premium pass-through" to my account every month. This amount has never been included on my W-2. The only contribution amount on my W-2 is what I contributed. Do I need to include the "premium pass-through" contributions on Form 8889 Line 9? After some Google searches, it seems like I am supposed to include this; however, if so, I don't understand why it's not included on my W-2.

TurboTax Premier Windows

Best answer by BillM223

I have not heard this terminology before, but I did find this reference: "many plans have what's called a "premium pass through," where a portion of your HDHC premiums are automatically contributed to the HSA." Indeed, I now see a number of plans from major companies seem to refer to this.

My question is, "If this premium pass-through is part of the insurance premiums that you pay, then is this amount part of the amount coded with "DD" in box 12 on your W-2?"

If it is, then you have also gotten your tax benefit, because the DD amount is removed from Wages in box 1 on your W-2. So reporting it with code W would be redundant.

If this pass though amount is not part of code DD, then, yes, it should have been with code W.

But if your employer chose not to do that (you should ask why, since the IRS instructions for the W-2 are pretty clear on this point), then do the following:

Go to Federal Taxes->Deductions & Credits->Medical and click on "HSA MSA Contributions".
Go to the screen entitled "Did your employer tell you about any other contributions?" (see screenshot below)
Click on "yes" to exposes the bottom three lines
Enter the amount of the pass-through on the last line (see red arrow)

B

BillM223Answer

I have not heard this terminology before, but I did find this reference: "many plans have what's called a "premium pass through," where a portion of your HDHC premiums are automatically contributed to the HSA." Indeed, I now see a number of plans from major companies seem to refer to this.

My question is, "If this premium pass-through is part of the insurance premiums that you pay, then is this amount part of the amount coded with "DD" in box 12 on your W-2?"

If it is, then you have also gotten your tax benefit, because the DD amount is removed from Wages in box 1 on your W-2. So reporting it with code W would be redundant.

If this pass though amount is not part of code DD, then, yes, it should have been with code W.

But if your employer chose not to do that (you should ask why, since the IRS instructions for the W-2 are pretty clear on this point), then do the following:

Go to Federal Taxes->Deductions & Credits->Medical and click on "HSA MSA Contributions".
Go to the screen entitled "Did your employer tell you about any other contributions?" (see screenshot below)
Click on "yes" to exposes the bottom three lines
Enter the amount of the pass-through on the last line (see red arrow)

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K

kirrenAuthor

Thank you! I can't tell if the premium pass through was included in the amount coded with "DD". I think either way I'll need to include the premium pass through on Form 8889, Line 9 since that line is really about making sure I don't go over the contribution limit. After some more googling, I found something that said the premium pass through is included when determining whether or not I've gone over the contribution limit.

I'll have to ask my employer if the premium pass through was included in the amount coded "DD".

Thanks so much for your help!

J

Jpepper1057

I've never heard of a premium pass through before, can you tell me which carrier your using for your HDHP. I would like to look into this further. Thanks

Jeanene

L

Loki_nv

I'm not sure the answer posted here is correct. Maybe they stopped phrasing it as premium pass through to clarify the issue. The contributions by your health insurance company aren't from your employer, rather a third party on your behalf. The HSA contributions deducted from your pay stub are subtracted from your income. The $100-$150/mo from the insurance company are from a third party on your behalf. As such from From 8889 IRS instructions:

"Include on line 2 only those amounts you, or others on your behalf, ...."

G

gwba

I am glad that there are many folks having a same issue. To wrap up,

1. W2 Box 12 W shows the amounts that employee contributed

2. Insurance company such as Cigna, BlueCross, Carefirst etc, is contributing DIRECTLY to the HSA amount each month. My case I got total $1,800 per year which is NOT included in W2 Box 12 W.

3. HSA company (my case HealthEquity) sends 5498-SA form (which is NOT required to report to the tax form, but informational purpose). This form includes $1,800 (5498-SA Box -2: Total contributions made in 202x). Some HSA company like Fidelity does NOT even issue 5498-SA by the end of May (after tax season)

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/form-5498-SA_HSA.pdf

4. Now the question is where this additional money from the insurance company contributed for us.

Should be 8889 Line 9 with manual input?

or Line 2?

For me, I have NOT filed these money ever (Actually, my accountant never added insurance contributed money and never asked me what to do) However, I also never over-contributed more than maximum amount of HSA each year to be safe. It means my yearly HSA contribution + insurance company paid money never made more than maximum HSA money. For me, I interpreted this way. As I mentioned above, 5498-SA is not required for tax reporting, thus I (or my accountant) didn't include insurance company paid money into 8889.

If you are curious, just search "5498-SA" form from TurboTax, then you will see first msg like below.

"Don't Enter Your Form 5498-SA".

Nevertheless that we don't enter 5498-SA in tax filing, I agree to report insurance contributed money as well in the form 8889 line 9 to make sure that maximum contributed money is NOT more than what we can contribute.

B

BillM223

@Loki_nv

To your point that the health insurance company's contribution should be listed on Line 2, I will point you to this: In the 2023 form 8889 instructions under Line 9 it says, "Also, include contributions made by a health insurance plan (emphasis mine) on an employer's behalf."

@kirren

It should be on your W-2, in this way. As noted above, the amount with code W in box 12 is removed from Wages in boxes 1, 3, and 5. In the same way, the amount with code DD in box 12 is also removed from Wages in box 1, 3, and 5.

So if part of the premium being paid to the health insurance company on behalf of the employee is the "pass-through" amount which ends up being contributed to the employee's HSA, then this contribution is also being removed from Wages in boxes 1, 3, and 5, so it would be appropriate to add this as a contribution that your employer told you about.

@gwba

"1. W2 Box 12 W shows the amounts that employee contributed" - as I think you know but others might not, the code W amount in box 12 on the W-2 includes both contributions from the employer and from the employee by means of payroll deduction.

"2. Insurance company such as Cigna, BlueCross, Carefirst etc, is contributing DIRECTLY to the HSA amount each month. My case I got total $1,800 per year which is NOT included in W2 Box 12 W. " - as you see in my answer to Loki_nv above, the IRS instructions for form 8889 specifically require that Line 9 on the 8889 list contributions from health insurance plans.

3. "Some HSA company like Fidelity does NOT even issue 5498-SA by the end of May (after tax season)" - Yes, this is why the 5498-SA is not required to be entered into TurboTax. Note that the 5498 (for IRAs) operated in a similar way.

4. "4. Now the question is where this additional money from the insurance company contributed for us.

Should be 8889 Line 9 with manual input?

or Line 2?" -

Per the IRS instructions for form 8889 (see above), the pass-through premium (and HSA contributions) should be reported on Line 9.

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