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Can We have two sequential Family HSA's?
Old 12-13-2020, 11:26 AM   #1
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Can We have two sequential Family HSA's?

I had a family HSA until I went on Medicare, My wife is 5 years younger,
can she open another Family HSA, and put the max $8,100 in it?
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Old 12-13-2020, 11:48 AM   #2
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Is her insurance an individual or family policy? If itís family and covers another family member along with her, she can contribute the family limit of $7200 to the HSA. If only your wife is covered on an individual policy, the contribution is a maximum of $3600. In both cases, an additional $1000 can be contributed if she is age 55 or over.
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Old 12-13-2020, 11:56 AM   #3
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Is her insurance an individual or family policy? If itís family and covers another family member along with her, she can contribute the family limit of $7200 to the HSA. If only your wife is covered on an individual policy, the contribution is a maximum of $3600. In both cases, an additional $1000 can be contributed if she is age 55 or over.

Thanks, ya, family policy, still covers the kids, and she's 55....+ :-)
I thought the kid rule was 26 yrs for kids, but I've told BCBS several times the kids are 29yrs old and 26yrs old, they say it's not a problem.
Maybe not for BCBS, but for me! Do the ever grow up?
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Old 12-13-2020, 12:16 PM   #4
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Thanks, ya, family policy, still covers the kids, and she's 55....+ :-)
I thought the kid rule was 26 yrs for kids, but I've told BCBS several times the kids are 29yrs old and 26yrs old, they say it's not a problem.
Maybe not for BCBS, but for me! Do the ever grow up?
Some states have different rules for how long kids can be covered on their parents' health plans. For most it's up to age 26, as required by ACA, but some states go up to age 30.

One loophole that you could take advantage of is that each of your adult children who is covered on the family plan is eligible to open his/her own HSA and contribute the max family contribution. So they could each save $7200 in their own HSA account and take the deduction on their own tax returns, giving you a total family benefit of $7200 x 2 + $8200 = $22,600. The contribution can come from anywhere, so should you feel inclined to do so, you can fund their accounts for them.
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Old 12-13-2020, 02:40 PM   #5
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Originally Posted by cathy63 View Post
One loophole that you could take advantage of is that each of your adult children who is covered on the family plan is eligible to open his/her own HSA and contribute the max family contribution. So they could each save $7200 in their own HSA account and take the deduction on their own tax returns, giving you a total family benefit of $7200 x 2 + $8200 = $22,600. The contribution can come from anywhere, so should you feel inclined to do so, you can fund their accounts for them.
This is an interesting loophole indeed. Thank you for bringing this up.

-gauss
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Old 12-13-2020, 03:02 PM   #6
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I had a family HSA until I went on Medicare, My wife is 5 years younger,
can she open another Family HSA, and put the max $8,100 in it?
There is no such thing as a family HSA. There are family health insurance policies, but not family HSAs.... HSAs are for an individual.

ETA: You can split your family contribution however you wish, as long as the amount contributed to any one individual HSA doesn't exceed the amount that they could contribute as an individual. So if both were over 55 the limit would be $9,100 and could be $1,000/$8,100 or $8,100/$1,000 or anything in between.

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If both spouses are 55 or older and not enrolled in Medicare, each spouse’s contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage can’t be more than $9,100. Each spouse must make the additional contribution to his or her own HSA.

Example. For 2020, spouses Ginger and Lucy are both eligible individuals. They each have family coverage under separate HDHPs. Ginger is 58 years old and Lucy is 53. Ginger and Lucy can split the family contribution limit ($7,100) equally or they can agree on a different division. If they split it equally, Ginger can contribute $4,550 to an HSA (one-half the maximum contribution for family coverage ($3,550) + $1,000 additional contribution) and
Lucy can contribute $3,550 to an HSA.
https://www.irs.gov/pub/irs-dft/p969--dft.pdf
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Old 12-13-2020, 03:04 PM   #7
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There is no such thing as a family HSA. There are family health insurance policies, but not family HSAs.

So what do you call it when you can contribute $7,100 in rather than $3,000?
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Old 12-13-2020, 03:08 PM   #8
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This is an interesting loophole indeed. Thank you for bringing this up.

-gauss

Hmm, are you sure there can be 3 HSA's on only one HDHP?
My daughter could have the $7,100 deduction and my son could have
$3,000. Any website, I can review?
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Old 12-13-2020, 03:15 PM   #9
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So what do you call it when you can contribute $7,100 in rather than $3,000?
Where does the $3,000 come from? See what I added to my previous post.
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Old 12-13-2020, 03:54 PM   #10
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Where does the $3,000 come from? See what I added to my previous post.
I think they're trying to refer to the self-only coverage amount, which is now $3,550 for 2020 and $3,600 for 2021.

You're right in your terminology, because the HSA itself doesn't care or know what your HDHP coverage is. But I think it's common and understandable (although technically incorrect) usage to refer to it the way Time2 did.
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Old 12-13-2020, 03:56 PM   #11
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Hmm, are you sure there can be 3 HSA's on only one HDHP?
My daughter could have the $7,100 deduction and my son could have
$3,000. Any website, I can review?
You can read the instructions for Form 8889 on the IRS website:

https://www.irs.gov/pub/irs-pdf/i8889.pdf

The above currently points to the 2019 version, so the contribution limits are slightly different but the general rules are all the same for 2020.

The loophole that cathy63 mentioned is a well known one. I doubt that the government will address it as it really isn't exploitable by very many people for very long, and the government probably has more important things on their priority list.

Why would your daughter's and son's situation be different? Just curious.
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Old 12-13-2020, 05:56 PM   #12
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Hmm, are you sure there can be 3 HSA's on only one HDHP?
My daughter could have the $7,100 deduction and my son could have
$3,000. Any website, I can review?
In addition to the tax form link that SecondCor521 provided, here's an article from Forbes that describes the strategy: https://www.forbes.com/sites/megango...h=69cfcff83aa2 This article is from 2019, so ignore the numbers and use the actual ones for 2020 or 2021, whichever year you're asking about.
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