My wife has a HSA High deductible group plan through her work. I am on SSDI. Is she allowed to keep me on her insurance? And is she allowed to make max contribution?

[amcelectric]

It is her plan through her work HSA  HDHP.  I have been on the plan for over 10 years along with her children.  I am now on SSDI disability for several years and her employer is questioning as to whether I can be on her group plan with her children which I have been since 2016.  Her employer has more than 100 employees and her HSA HDHP insurance has been primary and Medicare secondary.  Turbo Tax has never flagged my situation as a problem in past 2 years. IRS wont pick up the phone. Basically trying to figure out if IRS rules prevent me from being on her plan?  I use Turbo Tax Premium every year.

[SweetieJean]

Are you eligible for Medicare?

[Opus 17]

Do you have health insurance such as Medicaid, Medicare, or some other form of medical insurance?

[SweetieJean]

This sounds more like an insurance policy issue than a tax one.

[amcelectric]

Yes I am eligible because I am on SSDI but those rules pertain to the HSA account holder as i understand.  I just called Medicare and their information does not address my situation.

[amcelectric]

I have her insurance as primary and Medicare part a&b secondary.  I am also a 100% disabled veteran.  I read a similar situation from a tax person on the Internet that said, that the situation was ok because it is her hsa group plan.  I am not making any contributions.  Basically her employer was questioning it as though they were unsure.

[Opus 17 · Accepted solution]

So there are really 3 questions you are asking.  1. Can the employer cover you on her insurance?  2. Can your wife make contributions to an HSA?  3. Can your out of pocket costs be covered by your wife's HSA?  The employer may be getting the answers of the questions mixed up.

1. Your wife's employer has a lot of options in who they cover, as long as they apply the same rules to everyone.  They can refuse to cover a spouse who has other insurance (like Medicare) as long as they apply that rule to everyone.  Or they can charge more to cover a spouse who has other coverage but wants to make their coverage primary.  Having HSA-eligible insurance is not the same thing as being able to contribute to an HSA, and there are cases where someone might have HSA-eligible insurance and not be allowed to contribute.  But that is separate from the question of whether they can offer you health coverage if you have other insurance -- they can, as long as they follow the same rules for all their employees.

2. To be eligible to contribute to an HSA, a person must have HSA-eligible insurance AND have no other medical insurance available to them (except for certain narrow category of exceptions.)  But an HSA, like an IRA, is owned by one specific person.  There is no such thing as a "family" HSA, even though a person may have family insurance.  You are covered by a family HSA-eligible insurance policy, but you also have other medical insurance, so you are not eligible to make contributions to an HSA owned by you.  Your wife is covered by HSA-eligible insurance and has no other medical insurance, so your spouse is eligible to make contributions to an HSA owned by her.  Because your wife's policy is a family policy, she is eligible to make up to $6750 in contributions for 2017.

The fact that you have secondary coverage means you can't contribute to an HSA you own, but it doesn't affect your wife's ability to contribute to an HSA she owns as long as she has no other secondary coverage, and the HSA contribution issue has no affect on your ability to be covered by insurance in the first place.

3. Once your wife owns an HSA in her name, she can use it to pay for out of pocket medical expenses for herself, her spouse, or her dependents, even if they have other insurance coverage and even if she becomes ineligible to make further contributions some time in the future.  The issue of spending HSA money is completely separate from the issue of making new contributions to an HSA.

[langhimebaugh]

I believe this is correct... "Because your wife's policy is a family policy, she is eligible to make up to $6750 in contributions for 2017."  However TurboTax does not correctly allow for contribution over $3,500 for 2020 and calculates a $400 penalty.  Sounds like there used to be a checkbox in previous years for family coverage when filling out 1099-SA.   So currently an error in TurboTax I think.