Author Topic: Investing in my HSA although insurance is through my spouse. Will this work?  (Read 1110 times)

Swat

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I am currently an attending physician working as an independent contractor. Prior to this job, I was a resident with a W2 salary and contributed to my HSA every year (family contribution). Currently, my account has ~20k in it. However, now that I am an independent contractor, we get our family insurance through my wife who works part time. We are on a HDHP although her employer does not do any payroll deductions so we are able to invest whenever and with whomever we choose. My question is if we are able to contribute the max HSA amount to MY existing HSA since there is already so much in there rather than have to open a new one under my wife’s name just because our family insurance is through her. I don’t see why it would be a problem since our taxes are Married Filing Jointly, but then again, I have not read the full IRS publication on HSA’s so would appreciate the input.

Sibley

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You can only contribute to a HSA if you have an attached qualified high deductible health insurance plan. If the insurance is through her employer, the HSA is there too. You may be able to roll over the money from your account into the one in her name, that would depend on the rules set by her employer.

In short: you're very possibly stuck with 2 accounts.

MDM

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You can only contribute to a HSA if you have an attached qualified high deductible health insurance plan. If the insurance is through her employer, the HSA is there too.
Not necessarily.

Note:
We are on a HDHP although her employer does not do any payroll deductions so we are able to invest whenever and with whomever we choose.

Even if an employer would do payroll deductions, one could choose not to go that route but instead open an HSA anywhere one chooses.  That would lose the FICA reduction benefit, but if the income is above the SS max anyway, only the 1.45% medicare would be forgone.

charis

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You can only contribute to a HSA if you have an attached qualified high deductible health insurance plan. If the insurance is through her employer, the HSA is there too. You may be able to roll over the money from your account into the one in her name, that would depend on the rules set by her employer.

In short: you're very possibly stuck with 2 accounts.

Your HSA does not need to be "attached" to a HDHP, you just need to be eligible to contribute to one and only up to limit across all HSAs that you might have.  My spouse and I have two HDHPs (family and individual) and three HSAs, two through our respective employers for the FICA reduction and one unattached HSA of our choosing for investment purposes. 

I don't think you are even required to open an HSA if you have an HSA-eligible plan.  But if that is the case, they can keep her account empty and contribute everything to his.

Sibley

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I stand corrected. Apparently the rules I've had to navigate were employer applied!

thingamabobs

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First make sure your wife’s hdhp is HSA eligible. Unfortunately, lots of high deductible plans are not.

In my experience, if eligible I got notices from The insurance to set my my HSA all the time until it was done.

If eligible, you can continue to use your current hsa and contribute post tax. But like MDM said, you’d lose out on FICA. Or, if your wife’s work can do pre-tax deduction, have it taken out of payroll and then transfer to your hsa of choice. Keep in mind a lot of HSAs charge a fee for transfer out.