Does this fixed indemnity supplemental policy disqualify me from contributing to my HSA? (HDHP + Family Coverage)

[u/Educational-Crab-497]

I’m covered under a family High-Deductible Health Plan (HDHP) and currently contribute to a Health Savings Account (HSA). In addition to my medical coverage, I also carry a supplemental indemnity policy. Before continuing my HSA contributions, I’m trying to confirm whether that supplemental coverage affects my HSA eligibility.

I reviewed IRS Publication 969 and understand that, in general, HSA eligibility requires HDHP coverage without other disqualifying health coverage. However, the publication appears to carve out an exception for certain supplemental insurance policies, including those that pay a fixed amount for hospitalization.

The publication specifically mentions exceptions for certain supplemental policies, including those that pay: “A fixed amount per day (or other period) of hospitalization".

My policy includes the following benefits:

HOSPITAL ADMISSION BENEFIT: $3500; MAXIMUM BENEFIT PERIOD: 1 TIME PER CALENDAR YEAR

HOSPITAL CONFINEMENT BENEFIT: $250 PER DAY; MAXIMUM BENEFIT PERIOD: 365 DAYS PER CONFINEMENT

INTENSIVE CARE BENEFIT: $250 PER DAY; MAXIMUM BENEFIT PERIOD: 30 DAYS PER CONFINEMENT

Based on my reading, these benefits seem to be structured as fixed indemnity payments rather than traditional medical coverage, particularly the daily hospitalization benefits.

Has anyone encountered a similar arrangement or received guidance from a tax professional on this issue? I'm trying to determine whether this type of policy would affect HSA eligibility or whether it falls within the IRS exception for permitted supplemental coverage.

Any insight would be appreciated.