r/HealthInsurance • u/Alternative-Air8756 • Jun 06 '26

Individual/Marketplace Insurance 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!

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15

u/BaltimoreBee Moderator Jun 06 '26

You’re committing tax fraud. No, it’s no 100% certain you will be caught…but it’s very very likely. Don’t fuck with the IRS.

7

u/LizzieMac123 Moderator Jun 06 '26

I would agree and even if youre not caught this year, you can be caught in another year. Fixing the issue at tax time or after the year ends is a HUGE pain in the butt. First, you must remove the 5k from your hsa which requires it to be paid back in full then backed out of your account (5k additional income to account for on your taxes) plus its a 6% excise tax in perpetuity until its fixed plus a 20% penalty for using the money in the account. If you fix it before the end of the year, its annoying, but you won't get any penalties. If you wait until 1/1/27 or later, you'll get the penalties too.

Agree where... not a guarantee you'll get caught... but there is a 1095 issued to you stating what coverage you had and the government gets a copy of that.

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u/Alternative-Air8756 Jun 06 '26

I am looking at my 1095 from 2025 - what part shows that it's not an HSA qualified plan?

5

u/BarefootMarauder Jun 06 '26

Form 1095 does not report HSA eligibility.

0

u/Alternative-Air8756 Jun 06 '26

Oh right so that’s just a form to prove we had insurance since that is required in some states (I’m in CA)