HSA Contribution Limit for Adult Working Child in the Family HDHP Plan

Forum|Forum|6 years ago
July 12, 2020
1 reply
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What is the HSA contribution limit for adult working child filing individual return, but included in the family HDHP plan of the parents?

I believe the child can independently contribute $7000 to his/her own HSA account since the parents are not allowed to use their HSA funds for a child who is not a dependent. I would like to confirm this.

My child is covered under my family HDHP plan. I have contributed the maximum $7000 to my HSA for 2019. My child recently started working and filing the individual return for 2019. She signed up for her individual HDHP plan through her employer (I believe one is allowed to have multiple HDHP plans). Since she is included in my family HDHP plan, what would be the limit for her HSA contribution for 2019? Can she contribute $7000 to her HSA independently because she is covered by the family plan?

Anonymous

she really doesn't have family coverage, you do. she has self only coverage max contribution $3,500

under your assumption, it would be possible for a husband and wife to each contribute $7,000 if both were covered under your family plan

deepchandiAuthor

Level 2

Thanks for your response. I have a follow-up question on this, based on the articles published by HSA providers.

My daughter is covered under my family HDHP Plan, and she is filing as non-dependent (individual return).

There are multiple articles on the HSA account contribution by non-dependent adult children covered on the family HDHP plan. Please see the linked below.

#1. Because the employee’s HSA funds can’t be used for this dependent, the adult child may wish to establish a separate HSA for his expenses. However, there is something unique about this situation that many don’t realize. Because this child is covered on a family-qualified HDHP, opening a separate HSA would allow the child to contribute up to the allowed maximum family contribution of $6,750. So, the parent (your employee) could have an HSA and contribute the allowed maximum family contribution of $6,750 and the dependent adult child could contribute up to $6,750.

#2. As long as they are covered on the family qualified HDHP, adult children can contribute the full family HSA amount into their HSA account. The dependent's contributions will not reduce the amount their parents can deposit into their accounts.

https://americanfidelity.com/blog/reimburse/hsa-mistakes-dependents/

https://www.onedigital.com/blog/[product key removed]ren/

I would appreciate your opinion in this matter.

BillM223

Level 15

Yes, the ability of an adult child who is not a dependent but who is on the parents' HDHP policy is a bizarre and unforeseen consequence of the HSA code in Section 223 and the later Affordable Care Act (Obamacare, ACA) which, among other things, changed health insurance so that you could keep your adult children on your policy even when they are no longer your dependents. (The ACA was passed years after the HSA code was passed).

So, yes, daughter can open an HSA and contribute to it until such point as she is no longer on any HDHP policy.

Just to clarify "#2. As long as they are covered on the family qualified HDHP, adult children can contribute the full family HSA amount into their HSA account." should read "into their own HSA." The limits are applied to each HSA.

Actually, the daughter can contribute to the HSA of whichever parent is the owner (HSA belong to the individual, so each parent could have one - BUT the Family limit is shared between them), but the parents must count all contributions to his/her HSA from any source. So in this case, it would make sense for the daughter to make all of her contributions to her own HSA, which has its own limit.

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