Can a wife use her HSA to pay for husband's medical bills if he's under different non-high deductible plan? Also, what is the contribution limit for HSA in this instance?

[Opus 17 · Accepted solution]

You can use an HSA to pay for qualified medical expenses for yourself, a spouse, and your dependents, even if they are covered by other insurance.

Your contribution limit depends on the kind of insurance you have.  If you have single insurance and your spouse has single insurance, then your limit for 2017 is $3400, plus an additional $1000 if you are over age 55.  However, if your spouse has family insurance where you have secondary coverage, then you have "other insurance" and can't make deductible contributions to an HSA.  If you have family HDHP insurance that covers your spouse, and your spouse also has single non-qualifying insurance, then your contribution limit to your HSA is $6750. 

[Ammaos]

Just to clarify, if my husband has a HDHP for himself only and I have a non HDHP for myself and the kids, can he use his HSA to pay for my and our kids medical bills?

[sussil]

I have had an HSA for myself, spouse and son for many years as we were all on the same insurance plan.  Mid-year 2019, my husband moved to Medicare.  How does that impact the amount that I can contribute for 2019?  I retired in August but have the same HDHP plan.  Additionally, can I continue to use the HSA $'s for his medical expenses?  Thank you!

[PaulaM]

@Ammaos Yes, your husband can use his HSA to cover his dependents medical bills as long as they are not otherwise reimbursed.

[PaulaM]

@sussil If you have a family HDHP then you can contribute the full family amount for your HSA. Family is you and at least one other (your son assuming he's still covered by the HDHP). And yes, you can continue to use your HSA to pay for your spouse's medical expenses, including long-term insurance and medicare part A and D expenses. 

[cacophonix]

What is the definition of "not otherwise reimbursed"?

For example, assuming I am the one contributing to the HSA, and my wife has insurance through her employer. 

In a hypothetical situation, she encounters a medical bill of $600, of which $500 is reimbursed by her insurance and $100 is her responsibility. In this case, no one is reimbursing her for the $100, so can I use my HSA card to pay for it?

[Opus 17]

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@cacophonix wrote:

What is the definition of "not otherwise reimbursed"?

For example, assuming I am the one contributing to the HSA, and my wife has insurance through her employer. 

In a hypothetical situation, she encounters a medical bill of $600, of which $500 is reimbursed by her insurance and $100 is her responsibility. In this case, no one is reimbursing her for the $100, so can I use my HSA card to pay for it?

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Yes, that's what it means.  You can use the HSA to pay for things you would ordinarily pay for out of pocket, like co-pays and co-insurance.  You could not take the full $600 out of the HSA.

[T7512MR]

What happens in the case if the spouse is on their own PPO plan and you're on a High Deductible plan. Can you use your HSA account to pay for the spouse's non-covered medical bills?

[Opus 17]

@T7512MR 

You can always use HSA funds to pay for out of pocket medical expenses for yourself, your spouse, and your dependents, no matter what kind of insurance they have.  The question of insurance only determines whether or not you can make contributions, and how much you can contribute.

[kevinsu3841gmailcom]

Hi, I have a HSA from my employer and a lower deducted plan from my wife's company, I got my w-2, it shows I have 2000 dollars contributed to the HSA account. It seems I'm not eligible for non tax hsa at this situation. Can I ask how to file my tax return at this situation using turbo tax? Thank you

[Opus 17]

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@kevinsu3841gmailcom wrote:

Hi, I have a HSA from my employer and a lower deducted plan from my wife's company, I got my w-2, it shows I have 2000 dollars contributed to the HSA account. It seems I'm not eligible for non tax hsa at this situation. Can I ask how to file my tax return at this situation using turbo tax? Thank you

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If you are a covered person on your wife's plan, and your wife's plan is not HSA-eligible, then you are not eligible to make HSA contributions.

You must contact the HSA bank and ask for a "return of excess contribution".  This is not a regular withdrawal and may require a special form.  The bank will send you the money, and if there are any earnings from the money (bank interest or investment gains), the HSA bank must also send those to you.  You must do this before April 18, 2022.

For 2021, when you file your tax return, you will be advised that you have an excess contribution.  If you tell the program "I will remove the excess before the filing deadline" then the money will be added to your taxable wages and you will pay income tax on it.

Note that if you have a zero balance because you already withdrew the money for qualified medical expenses, you don't have to remove it again.  The amount will still be added to your taxable wages, but there won't be an additional penalty. 

If there were any earnings from the money, that will be reported as a withdrawal on a 1099-SA that you will get next year and that interest income will be taxable on your 2022 return. 

[BillM223]

Yes, this is how you will file your return:

When you go into the HSA interview in TurboTax, the box that you have an HSA will already be checked (because you have 2,000 with the code of W in box 12 on your W-2).

Go through the HSA interview for you, and when you are asked if you had HDHP coverage, answer "No" and continue. This will trigger the excess contributions processing.

Then everything will go as Opus said above.

[kevinsu3841gmailcom]

I also spend 1000 dollars from that HSA account in 2021, should I notice in the turbo tax all of those payments, I can't even remember what's the detail of each payment transaction.

[BillM223]

No, What will happen is at the end of the year, you should get a 1099-SA with a distribution code of "1" for the aggregate of money spent from your HSA (the 1099-SA for the withdrawal of excess contributions with a code of "2" will be a separate form).

The IRS doesn't want your details on a tax return (but you should keep these records, in case you are ever audited), so just enter the 1099-SA when you get it. This is for expenses in 2021, right? Then you should have gotten the 1099-SA with the distribution code of "1" already.