Family HDHP & HSA

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
47Percent
Posts: 336
Joined: Tue Oct 29, 2013 9:59 pm

Family HDHP & HSA

Post by 47Percent » Sun Aug 12, 2018 9:00 pm

1) If one spouse is on Medicare and the other spouse & a child have a Family HDHP, can the non-medicare spouse contribute to HSA at family level?

2) Is that still the case if that child happens to be betn. 18-25, and not a tax dependent but is on the parent's insurance.

3) I am assuming the Medicare spouse cannot contrbute to HSA at all, including the 55+ bonus amount of $1,000. Plz. confirm.

User avatar
tfb
Posts: 7954
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: Family HDHP & HSA

Post by tfb » Sun Aug 12, 2018 9:22 pm

47Percent wrote:
Sun Aug 12, 2018 9:00 pm
1) If one spouse is on Medicare and the other spouse & a child have a Family HDHP, can the non-medicare spouse contribute to HSA at family level?

2) Is that still the case if that child happens to be betn. 18-25, and not a tax dependent but is on the parent's insurance.

3) I am assuming the Medicare spouse cannot contrbute to HSA at all, including the 55+ bonus amount of $1,000. Plz. confirm.
1) Yes. $1,000 extra as well if 55 or older.
2) Yes, but the HSA money can't be used on the child's expenses. The child can contribute to his/her own HSA at the family level as well! The money in the child's HSA of course can be used on the child's expenses (but not the parent's expenses).
3) Correct, but if the Medicare spouse got onto Medicare mid-year, he/she can still contribute partially for the months not on Medicare.
Harry Sit, taking a break from the forums.

47Percent
Posts: 336
Joined: Tue Oct 29, 2013 9:59 pm

Re: Family HDHP & HSA

Post by 47Percent » Sun Aug 12, 2018 9:26 pm

tfb wrote:
Sun Aug 12, 2018 9:22 pm
1) Yes. $1,000 extra as well if 55 or older.
2) Yes, but the HSA money can't be used on the child's expenses. The child can contribute to his/her own HSA at the family level as well! The money in the child's HSA of course can be used on the child's expenses (but not the parent's expenses).
3) Correct, but if the Medicare spouse got onto Medicare mid-year, he/she can still contribute partially for the months not on Medicare.
Thank you so much. Much appreciated.. That's what I would have guessed, but with these things one can never be sure.

masteraleph
Posts: 587
Joined: Wed Nov 04, 2009 9:45 am

Re: Family HDHP & HSA

Post by masteraleph » Sun Aug 12, 2018 9:33 pm

tfb is correct. But to source it:
" Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual)."

"Any eligible individual can contribute to an HSA. For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person also may make contributions on behalf of an eligible individual."

"The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. For 2017, if you have self-only HDHP coverage, you can contribute up to $3,400. If you have family HDHP coverage, you can contribute up to $6,750."
- IRS Publication 969
So because the coverage is for you + 1 (your child), you can make the family contribution. If your child is not a dependent, then their coverage is on an HDHP for them +1 (you), so they can also contribute at the family level, provided that they don't have any non-HDHP insurance coverage (i.e. they are an eligible individual).

The part detailing who can have expenses paid for them comes later in the document:
Qualified medical expenses are those incurred by the following persons.

You and your spouse.
All dependents you claim on your tax return.
Any person you could have claimed as a dependent on your return except that:
The person filed a joint return,
The person had gross income of $4,050 or more, or
You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2017 return.
So if your child isn't a dependent, you can't pay their expenses, and they obviously can't pay yours. You can pay your spouse's expenses, though, even though they're on Medicare.

Spirit Rider
Posts: 8706
Joined: Fri Mar 02, 2007 2:39 pm

Re: Family HDHP & HSA

Post by Spirit Rider » Sun Aug 12, 2018 10:07 pm

masteraleph wrote:
Sun Aug 12, 2018 9:33 pm
tfb is correct. But to source it:

So because the coverage is for you + 1 (your child), you can make the family contribution. If your child is not a dependent, then their coverage is on an HDHP for them +1 (you), so they can also contribute at the family level, provided that they don't have any non-HDHP insurance coverage (i.e. they are an eligible individual).
tfb is correct, but your bolded conclusion from the source is not. The HDHP coverage is the non-Medicare spouse +1 (the child) period. In fact, I don't even know what you mean by the bolded statement.

Their family HSA eligibility is purely based on being covered under a family HDHP, not being a dependent and having no disqualifying coverage.

Post Reply