consolidating HSA accounts.

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veerain
Posts: 31
Joined: Fri Jul 08, 2011 4:02 am

consolidating HSA accounts.

Post by veerain » Sun Apr 15, 2018 1:32 pm

me and my wife have separate HSA accounts (opened by previous employers). Is it possible to consolidate them? We talked to the HSA provide and they said they can transfer only if source and destination belonged to same person. But If we withdraw all the money from my wife's account, and deposited in my account - would there be any tax consequences? We file our taxes as married filing jointly.

Thank you,
Veerain

Spirit Rider
Posts: 9178
Joined: Fri Mar 02, 2007 2:39 pm

Re: consolidating HSA accounts.

Post by Spirit Rider » Sun Apr 15, 2018 2:40 pm

No, it is not possible to combine HSA accounts of different persons. HSA accounts like every other tax-advantaged (IRA, 401k, etc...) account. They are individually owned by a single individual and no rollovers are permitted except to the same individual or after their death.

If you attempted to do so. Any non-qualified distribution would be subject to ordinary income tax and a 20% penalty. Any attempted contribution of this money other than as available contribution space would be an excess contribution and subject to a 6% excise tax every year unless; removed with taxable earnings, non-qualified distributions taxed a described previously or reconciled with future unused HSA contribution space.

veerain
Posts: 31
Joined: Fri Jul 08, 2011 4:02 am

Re: consolidating HSA accounts.

Post by veerain » Sun Apr 15, 2018 3:38 pm

Thank you spirit rider. That too bad - We are trying to consolidate 1) to make accounting easy and 2) because my wife's HSA custodian charges $4/month...while mine does not. Unfortunately my HSA custodian (Fidelity) does not allow new individual accounts - they can be opened only thru employer :(. Is there any other way for my wife to avoid the $4 charge per month.

Spirit Rider
Posts: 9178
Joined: Fri Mar 02, 2007 2:39 pm

Re: consolidating HSA accounts.

Post by Spirit Rider » Sun Apr 15, 2018 4:26 pm

veerain wrote:
Sun Apr 15, 2018 3:38 pm
Thank you spirit rider. That too bad - We are trying to consolidate 1) to make accounting easy and 2) because my wife's HSA custodian charges $4/month...while mine does not. Unfortunately my HSA custodian (Fidelity) does not allow new individual accounts - they can be opened only thru employer :(. Is there any other way for my wife to avoid the $4 charge per month.
In the vague recesses of my addled brain. I seem to remember that Fidelity at least at one point allowed a spouse of a current HSA account owner to open their own HSA account.

Of course that does not help you with your search for a fee free account. Fidelity would most likely charge her their $12/quarter fee.

motorcyclesarecool
Posts: 571
Joined: Sun Dec 14, 2014 7:39 am

Re: consolidating HSA accounts.

Post by motorcyclesarecool » Sun Apr 15, 2018 5:21 pm

Is there a reason you couldn’t spend her HSA down leaving yours intact?
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Miriam2
Posts: 2355
Joined: Fri Nov 14, 2014 11:51 am

Re: consolidating HSA accounts.

Post by Miriam2 » Sun Apr 15, 2018 8:35 pm

Spirit Rider wrote: In the vague recesses of my addled brain, I seem to remember that Fidelity at least at one point allowed a spouse of a current HSA account owner to open their own HSA account.
Spirit Rider - having read your posts for many years and having been the lucky recipient of your wealth of knowledge you provide on this forum in the most decent manner, I'm sure I speak for everyone that you have no vague recesses and your brain is not addled :happy

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