If your wife is covered by an HSA-eligible HDHP, and has no other disqualifying situations, she can open an HSA. (Many banks offer private HSAs for people who don’t have access to an employer plan.)
Yes, she can make contributions, take a tax deduction, and then immediately withdraw the money to pay for qualifying expenses. COBRA premiums are allowed, as well as other out of pocket medical expenses. You will save on federal income tax, and state income tax in most states.
Be aware that qualifying costs are only costs incurred after the HSA is opened. So if she opens an HSA now, her January 2024 premiums would be qualifying expenses but not 2023 premiums.
Also note that her contribution limit for 2023 depends on how many months she was enrolled in qualifying coverage on the first day of the month. For example, if the coverage started August 1, her 2023 contribution limit is 5/12th of the maximum**. If she plans to remain covered by an HSA eligible plan for all of 2024, she can contribute the full year limit for 2023 using the last month rule, but if her coverage ends early in 2024, she will be assessed a penalty. She can make contributions for 2023 up to April 15, 2024, but if making contributions for 2023 after the New Year, make sure to tell the bank in advance that you are making a 2023 contribution--there may be a paper form or menu selection on the web site.
**Her maximum contribution for 2023 is $3850 if she is enrolled in single insurance, or $4850 if she is age 55 or older.
