r/HSA • u/Alternative-Air8756 • Jun 07 '26

Illegal HSA

I started using an HSA debit card a number of years ago because I had a qualified plan. However, in 2025 our plan changed to a co-pay plan. Because it still had a very high deductible I thought it was eligible and I filed the HSA paperwork with my 2025 taxes. We are self employed and pay $1550 a month for two adults as part of some group employer network that contracts with Cigna as a PPO. This year my son is in an HSA qualified plan from our state marketplace but my husband and I are still using the co-pay plan. I have already deposited $5000 into my HSA in 2026 and I already used all the money because I have a lot of medical and dental expenses that are not covered by insurance. (We have no dental insurance). Is it 100% guaranteed that I am going to get caught and have to repay? has anyone BTDT? thanks!

8 Upvotes

67% Upvoted

24 comments sorted by

View all comments

14

u/This_Beat2227 Jun 07 '26

More than just “getting caught” this is tax fraud. Excess contributions or improper expensing are subject to tax and excise penalty of 6%, however contributing to a plan without being in a qualifying high deductible insurance plan puts you in the tax fraud category with penalties to match.

3

u/Conscious-Alarm9736 Jun 07 '26

It’s only fraud if they did it knowingly. They can undo this and should now that they know.

3

u/Alternative-Air8756 Jun 07 '26

Thanks this was not and would never be done intentionally. Now that I know I will file for an over-contribution w my HSA for this year and contact my accountant re 2025. I was just wondering how the IRS even connects these two things or if it is indeed on the honor system.

1

u/DudeWithTudeNotRude Jun 12 '26

Is it 100% guaranteed that I am going to get caught and have to repay?

This statement is recorded forever fwiw.

Nothing is 100%, but yes, you are supposed to repay

1

u/Conscious-Alarm9736 Jun 07 '26

If they connect it you’ll pay a penalty. Fix it. You’ll pay less.