Are my spouse and adult children covered by my HSA/FSA?

Whether you have a Health Savings Account (HSA) or a healthcare Flexible Spending Account (FSA), you may have questions about how these benefits can be put to work for your spouse or adult children.

Let’s explore some common questions about how an HSA or a healthcare FSA fits into your family’s coverage strategy. With a firm grasp of the rules, you can maximize your savings, leverage your tax advantages, and prepare for your healthcare expenses today and tomorrow.

Using HSA funds for your family

You can use your HSA funds to pay for qualified medical expenses for your spouse and any dependents you claim on your tax return. This applies even if they have their own insurance or are on a different plan.

While you must be covered by a high-deductible health plan (HDHP) to open and contribute to an HSA, your dependents do not need to be on your plan for you to use your HSA funds for their care.

Using FSA funds for your family

You can use your healthcare FSA funds for eligible expenses incurred by your spouse and dependents, as long as they meet the eligibility rules set by the IRS.

They do not need to be covered by your health plan. Please note that you cannot use FSA funds to pay for health insurance premiums.

What happens if both spouses have an HSA?

You and your spouse can each open a separate Health Savings Account (HSA). Your contribution limits depend on whether you have individual or family HDHP coverage.

If both spouses have self-only coverage, each person can contribute to the individual IRS limit. If one or both spouses have family coverage, you share the combined maximum family contribution limit for the year. View contribution limits here.

Here’s where your strategy can make an even greater impact: If you or your spouse will be age 55 or older during the tax year, you’re eligible to make an extra catch-up contribution of up to $1,000 — directly into your own HSA.

If both spouses are 55 or older, each can add that additional $1,000, for a total of $2,000 in extra savings. To take full advantage, each spouse must have their own individual HSA to make the catch-up contribution.

If your spouse does not have an HSA yet, HealthEquity makes it simple. You can open an account for your spouse any time.

The spousal account does not need to be sponsored by your employer, offering even more flexibility to maximize your family’s savings and optimize your long-term health and financial goals.

It’s smart to coordinate contributions with your spouse so you don’t exceed the annual IRS limits, and to get the most benefit from catch-up contributions as you plan for healthcare expenses.

What if both spouses have a healthcare FSA?

You and your spouse can each open a healthcare FSA through your respective employers. You can each contribute to the maximum limit for the year.

How a spouse’s FSA can affect your HSA eligibility

If your spouse has a general-purpose healthcare FSA, it theoretically covers medical expenses for both of you. The IRS considers this disqualifying coverage for the spouse who wants an HSA.

Even if you don’t actively use your spouse’s FSA and you are not on your spouse’s health plan, you remain ineligible to open or contribute to your own HSA.

Coverage rules for older adult children

The rules change slightly as your children grow older. Here is how your accounts handle adult children.

HSA rules for adult children

Your health plan might cover your children up to age 26, but you can only use your HSA funds for their qualified medical expenses if they qualify as your tax dependents.

A tax dependent typically includes children under 19, or full-time students under 24.

The adult child HSA exception

If you have an adult child who is covered by your family HDHP but no longer qualifies as your tax dependent, they have a unique opportunity: they can open their own HSA.

Anyone can contribute to this account, including parents. Learn more about the opportunity to open an HSA here.

FSA rules for adult children

Healthcare FSAs allow you to get reimbursed for eligible expenses incurred by your children up to age 26. You can use this benefit whether the child is married, lives with you, attends school, or qualifies as a tax dependent.

Just keep in mind that dependents who turn 26 during the tax year are not eligible for FSA reimbursement.