Joint HSA/Medicare

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tmsul100
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Joint HSA/Medicare

Post by tmsul100 » Mon Jun 29, 2020 2:29 pm

My spouse and I share a joint HSA. I'm turning 65 next year, my spouse won't be 65 for several years. As I understand it, I will no longer be able to contribute to our HSA once I'm on Medicare, but can still use the funds in our current joint HSA. Questions: in order to continue to contribute, will my spouse have to open her own individual HSA?; do we both continue to have access to our joint HSA?; if so does that mean, essentially, my spouse will have access to her newly opened individual HSA and our joint HSA?; if not, how is the $$ in the joint HSA "divvied" up. Many thanks,

02nz
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Re: Joint HSA/Medicare

Post by 02nz » Mon Jun 29, 2020 2:40 pm

I don't have an answer to your question, but just a note in case you weren't already aware that you can use your HSA to pay Medicare premiums and - I believe - even IRMAA surcharges.

Big Dog
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Re: Joint HSA/Medicare

Post by Big Dog » Mon Jun 29, 2020 2:50 pm

tmsul100 wrote:
Mon Jun 29, 2020 2:29 pm
My spouse and I share a joint HSA. I'm turning 65 next year, my spouse won't be 65 for several years. As I understand it, I will no longer be able to contribute to our HSA once I'm on Medicare, but can still use the funds in our current joint HSA. Questions: in order to continue to contribute, will my spouse have to open her own individual HSA?; do we both continue to have access to our joint HSA?; if so does that mean, essentially, my spouse will have access to her newly opened individual HSA and our joint HSA?; if not, how is the $$ in the joint HSA "divvied" up. Many thanks,
1. you are good for next year in the family hsa account. Your wife can contribute the full amount and you only a prorated amount (based on months; note, you are eligible for Medicare on teh first of the month that you turn 65, unless your DoB is the first of the month, in which case you are eligible the month prior. i.e., if your birthday is July 1, then you are eligible for Medicare on June 1).

2. The money can be divvied up from the family account any way you see fit, for all of your medical expenses, for all of hers, or combination.

3. The year after you turn 65, not sure its required, but much easier (for paper trail) for wife to open her own HSA account, that way she can contribute the max on Jan 2 if she so desires.

P.S. Big fan of Fidelity's HSA program.

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FIREchief
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Re: Joint HSA/Medicare

Post by FIREchief » Mon Jun 29, 2020 2:54 pm

This is the first time I've ever heard of joint HSA's. Is this a new thing?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

sailaway
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Re: Joint HSA/Medicare

Post by sailaway » Mon Jun 29, 2020 2:57 pm

FIREchief wrote:
Mon Jun 29, 2020 2:54 pm
This is the first time I've ever heard of joint HSA's. Is this a new thing?
HSAs are weird. They are technically individual, but there is a family limit and the whole family can benefit.

ChrisC
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Re: Joint HSA/Medicare

Post by ChrisC » Mon Jun 29, 2020 3:17 pm

I don't think there is a recognizable "joint HSA." HSAs are individual accounts, but there are family HDHPs, which permit HSA contributions up to the family contribution limits for HSAs, to be made into accounts maintained by family members. I'm sure someone will post and clarify this up for the OP, with appropriate references to the IRS literature.

Personally, I previously had an HDHP covering family members. My family level HSA contributions went into my HSA account, but we could have split them into my HSA or my wife's HSA, which she funded solely with HSA catch-up contributions when she turned 55. When my wife enrolled in Medicare (2 years before I enrolled in Medicare), she could no longer fund her HSA with catch-up contributions, but I still had a family HDHP for me and her, and I was able to fund my HSA at the family contribution limit plus catch-up contributions. So, even when she was on Medicare (and I wasn't), I still made maximum family level HSA contributions to my HSA; my wife wasn't eligible to make any contributions, but she was covered, insurance-wise, by Medicare and my HDHP.

Also, as someone else mention, become knowledgeable about making pro-rata HSA contributions for the year, when you migrate unto Medicare; you can still make HSA contributions during the year you enroll in Medicare on a pro-rata basis.

Of course, HSAs can pay for medical expenses for eligible family members. My HSA can pay for my wife's medical expenses and her HSA can pay for my medical expenses; and I pretty sure we can use these accounts to pay for our Medicare premiums (including IRMAAs), as well as my FEHB insurance premiums, now that we're both beyond 65 years old.

TropikThunder
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Re: Joint HSA/Medicare

Post by TropikThunder » Mon Jun 29, 2020 3:44 pm

:x
Big Dog wrote:
Mon Jun 29, 2020 2:50 pm
3. The year after you turn 65, not sure its required, but much easier (for paper trail) for wife to open her own HSA account, that way she can contribute the max on Jan 2 if she so desires.
It is required. All HSA’s are individual accounts even if the contributor is making a family-sized contribution. DW can’t contribute to DH’s HSA if he’s on Medicare (Medicare makes DH ineligible to contribute which makes his HSA ineligible to accept new contributions).

OP, I don’t know how long you’ve had an HSA (or HSA-eligible coverage) but your wife could have been making an additional $1,000 contribution per year for being 55 or over but it would have had to go into her own HSA.

jebmke
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Re: Joint HSA/Medicare

Post by jebmke » Mon Jun 29, 2020 4:57 pm

FIREchief wrote:
Mon Jun 29, 2020 2:54 pm
This is the first time I've ever heard of joint HSA's. Is this a new thing?
NO. HSA's are individual accounts but can be used to reimburse expenses of joint taxpayer (spouse) or dependents.
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MP123
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Re: Joint HSA/Medicare

Post by MP123 » Mon Jun 29, 2020 4:58 pm

It sounds like you have an HSA account, and perhaps your spouse is an authorized signer on it. You can spend the funds on either of you, but it's really your HSA account. All HSA accounts are individual.

As mentioned above your spouse should open her own HSA account now and make her $1,000 annual catch up contribution to it in addition to your contributions into your HSA.

lstone19
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Re: Joint HSA/Medicare

Post by lstone19 » Mon Jun 29, 2020 5:55 pm

As stated above, no such thing as a joint HSA. And whose HSA it is, as I understand it, makes a difference when paying Medicare premiums while one spouse is under 65. As I understand it, Medicare premiums can only be paid from a spouse's HSA if the spouse is over 65. From IRS Pub. 969:

Insurance premiums.
You can’t treat insurance premiums as qualified medical expenses unless the premiums are for any of the following.
...
4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).
...
For item (4), if you, the account beneficiary, aren’t 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally aren’t qualified medical expenses.

Big Dog
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Re: Joint HSA/Medicare

Post by Big Dog » Mon Jun 29, 2020 6:13 pm

sailaway wrote:
Mon Jun 29, 2020 2:57 pm
FIREchief wrote:
Mon Jun 29, 2020 2:54 pm
This is the first time I've ever heard of joint HSA's. Is this a new thing?
HSAs are weird. They are technically individual, but there is a family limit and the whole family can benefit.
Correct. One family unit can have one HSA with the family maximums (as longs all are covered by a HD-HSA plan), including the over 55 catch-ups. If both spouses are employed with separate insurance, they each need a separate HSA. But if both spouses are employed, but covered under a family plan of one spouse, they could setup one HSA. And once a 'family' account is setup, it can be used to pay for expenses for any family member.

The IRS does not care how many HSA's you have, as long as you don't put in more than the max allowable for that year.

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MP123
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Re: Joint HSA/Medicare

Post by MP123 » Mon Jun 29, 2020 6:29 pm

Big Dog wrote:
Mon Jun 29, 2020 6:13 pm

Correct. One family unit can have one HSA with the family maximums (as longs all are covered by a HD-HSA plan), including the over 55 catch-ups. If both spouses are employed, they can choose to setup separate HSA's, but it is not required. And once a 'family' account is setup, it can be used to pay for expenses for any family member.
Actually, the over 55 catch ups need to go into each qualified person's HSA. They can't be combined into just one of the spouse's HSA, that would create an excess contribution.

There is also no requirement that either spouse be employed to make an HSA contribution.

You're right though that dependents and spouse can be paid for from either HSA.

Ultimately an HSA is in one individual's name and associated with their SSN.

Big Dog
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Re: Joint HSA/Medicare

Post by Big Dog » Mon Jun 29, 2020 6:38 pm

MP123 wrote:
Mon Jun 29, 2020 6:29 pm
Big Dog wrote:
Mon Jun 29, 2020 6:13 pm

Correct. One family unit can have one HSA with the family maximums (as longs all are covered by a HD-HSA plan), including the over 55 catch-ups. If both spouses are employed, they can choose to setup separate HSA's, but it is not required. And once a 'family' account is setup, it can be used to pay for expenses for any family member.
Actually, the over 55 catch ups need to go into each qualified person's HSA. They can't be combined into just one of the spouse's HSA, that would create an excess contribution.
....
Oops, my bad. You are correct, that the catch up must go into separate accounts.

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FIREchief
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Re: Joint HSA/Medicare

Post by FIREchief » Mon Jun 29, 2020 9:14 pm

FIREchief wrote:
Mon Jun 29, 2020 2:54 pm
This is the first time I've ever heard of joint HSA's. Is this a new thing?
Ok. It sounds like there is no such thing, which is exactly what I thought. I understand the rest about HSA’s. Nothing new here. 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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