HSA accounts, family or one per

[Clover5]

Just read tonight about having a separate HSA account per spouse or a “family” account. I read we can split the contribution between the accounts except for catch up goes to 55+ members account. Or it sounds like we can have a single family account with combined contributions. I am confused about the advantage of one over the other.

 

[Jerry1]

I've been wondering the same thing. I contributed to my HSA when I worked and had employer health insurance. My wife was on the insurance. Does that make my HSA "ours". I hope so because I'm thinking I may use some of it to pay for her Medicare Part B expense. If it's "mine", I won't be able to do that, or even use it for her medical expenses if needed.

 

[audreyh1]

It’s not a family account. Like an IRA these are individual accounts- only one person is named on the account, even though they can pay medical expenses of family members. Contributions can be made to just one account except for the catch-up contribution, but once the owner turns 65 s/he can no longer contribute to the account. At some point you will have two accounts anyway to take advantage of the catch-up contribution.

 

[audreyh1]

I've been wondering the same thing. I contributed to my HSA when I worked and had employer health insurance. My wife was on the insurance. Does that make my HSA "ours". I hope so because I'm thinking I may use some of it to pay for her Medicare Part B expense. If it's "mine", I won't be able to do that, or even use it for her medical expenses if needed.

No, it’s only yours, even though you can pay her Medicare expenses as long as you also qualify for Medicare, but not if you are younger than 65.

 

[SecondCor521]

It’s not a family account. Like an IRA these are individual accounts- only one person is named on the account, even though they can pay medical expenses of family members. Contributions can be made to just one account except for the catch-up contribution, but once the owner turns 65 s/he can no longer contribute to the account. At some point you will have two accounts anyway to take advantage of the catch-up contribution.

"Family members" is not quite right. It's spouse and dependents, which is approximately but not necessarily the same thing.

Also, it's not age 65, it's enrolled in Medicare, which again is approximately but not exactly the same thing.

 

[Clover5]

So, is this correct?

Me 59yo
Spouse 53yo

This year:
I open 1 HSA account in my name with an HDHP plan for us both
We can put 7,200 into the one HSA account
I can add the catchup of 1,000 to same account
I can pay his expenses and mine from same account

In 2 years when he is 55:
I would open 2nd HSA in his name to put his catch up into?

 

[SecondCor521]

Yes. Although technically (I know) the HDHP plan must be HSA qualified. Not all are. (*)




(*) "Is that like all thumbs are fingers, but not all fingers are thumbs?" "Surprisingly, yes"

 

[fh2000]

So, is this correct?

Me 59yo
Spouse 53yo

This year:
I open 1 HSA account in my name with an HDHP plan for us both

We can put 7,200 into the one HSA account
I can add the catchup of 1,000 to same account
I can pay his expenses and mine from same account

In 2 years when he is 55:
I would open 2nd HSA in his name to put his catch up into?

You will need to open 2 HSA accounts; one for you (3600+1000), and one for your spouse (3600). You can not have one account for both of you.

 

[Clover5]

So it’s not very clear on the IRS website but one example is contrary to having to have 2 accounts:

“Chris, age 53, becomes an eligible individual on December 1, 2020. He has family HDHP coverage on that date. Under the last-month rule, he contributes $7,100 to *his* HSA.”

 

[cathy63]

You will need to open 2 HSA accounts; one for you (3600+1000), and one for your spouse (3600). You can not have one account for both of you.

This is not correct. If a married couple is covered by an HSA eligible Family HDHP, then they can divide the $7200 between their accounts any way they would like. $7200 (+$1000) and $0 is allowed, in which case, the younger person does not need an account at all. A married person only needs to open an HSA if they want to make a catch-up contribution.

See the instructions for Form 8889 for examples: https://www.irs.gov/pub/irs-pdf/i8889.pdf

 

[bobandsherry]

My understanding, as per reading Fidelity's HSA FAQ's.

First, you can have as many HSA accounts as you want. You are not limited to just "mine" and "theirs". You can deposit money into any account or all accounts up to the annual limit ($3,600 for individual health plans, $7,200 for family plans).

If you are over 55 you may make a "catch up" contribution of up to $1,000. If your spouse is over 55 they too can make an additional "catch up" contribution of up to $1,000. Total of $2,000 per couple if both are 55+. Key to this is ONLY THE HSA OWNER can make a catch up contribution. So you can deposit $1,000 "catch up" into HSA account under YOUR name. Your spouse would deposit into HSA account under THEIR name. So, you only need an account in your name and your spouses name if both are 55+. You can make up to $1,000 eligible "catch-up" into the respective OWNERS account. The annual contribution of $7,200 can be deposited to one or more accounts (as noted in the first comment). Specific to your question, yes you can deposit the full $8,200 into YOUR account.

HSA account can be used for eligible expenses to reimburse you, your spouse and eligible dependents.

You can read the full FAQ list: https://www.fidelity.com/go/hsa/faq...ntribution limits,200 for family health plans.

 

[Clover5]

Thanks, this is making sense. One last question about timing. Based on the Fidelity website it seems that to have to signup for the HDHP HSA qualified plan and wait until it takes effect on May 1 before I open the HSA, correct? Understand that I can’t make a contribution until after May 1st. It’s not a big deal either way I suppose.

 

[audreyh1]

You will need to open 2 HSA accounts; one for you (3600+1000), and one for your spouse (3600). You can not have one account for both of you.

You can make all the regular contributions to one account. It’s just the 55+ catch-up contributions that is restricted to one per HSA account.

 

[RetireAge50]

We have one account. Jammed $8,200 into it last week as I will turn 55 later this year. Probably won’t bother with another account when my wife turns 55 next year.

 

[ocean view]

Thanks, this is making sense. One last question about timing. Based on the Fidelity website it seems that to have to signup for the HDHP HSA qualified plan and wait until it takes effect on May 1 before I open the HSA, correct? Understand that I can’t make a contribution until after May 1st. It’s not a big deal either way I suppose.

You are exactly right on the timing. After May 1 you are golden.