HSA rollover between spouses?

[janettebournes]

My spouse has been mulling early retirement in the last few months.

He works for a larger hospital system and has better benefits the entire family has been covered under his benefits (including HDHP and subsequent family contributions to an HSA under my husband's name)

If he were to retire, we would obviously be switching to my company's benefits. Both companies use Optum Bank for HSA purposes.

Do you know if I could rollover my husband's HSA into my newly created one? Do we have to live with 2 separate HSAs? Thanks!

[spiritrider]

Every HSA is an individual account. You can not roll over from one individual's account to another individual's account.

Both HSA accounts can be used to pay for either spouse's qualified medical expenses and any dependents.

[janettebournes]

spiritrider wrote:

Every HSA is an individual account. You can not roll over from one individual’s account to another individual’s account.

Both HSA accounts can be used to pay for either spouse’s qualified medical expenses and any dependents.

Click to expand...

Gotcha, thanks for confirming.

The first person I spoke to at Optum erroneously said I could contribute to my husband's HSA.

The second person I spoke to at Optum indicated the same thing as you: each HSA is an individual account and that I would need to open my own account with them.

I was hoping to avoid having two HSAs but I guess no way around it. Thanks for confirming!

[spiritrider]

The first person at Optum was not in error in the proper context. Each HSA account is only owned by one individual. However, once an HSA eligible individual opens an HSA account anyone can make a contribution to that account while staying within the limits. This can be the company, family members, friends, total strangers, etc...

Also, under the rules for married people, the spouse issued the HDHP family plan and the other covered spouse are both considered HSA eligible individuals, provided that the other covered spouse is not disqualified by other medical insurance. Therefore, they each can have their own HSA and the family plan contribution limit can be allocated anyway the spouses agree.

So technically, if your spouse was covered under your HDHP family plan, you could keep his plan and make direct deductible HSA contributions to his account. However, this would be unwise, because only the HDHP policyholder can make pre-tax/pre-FICA HSA contributions by payroll deduction. You would be giving up the ability to save FICA taxes on the HSA contributions. Also, any employer contributions would have to go to your account.

One thing to keep in mind. There is a $1,000 catch-up contribution when a person is >= age 55. This applies to both spouses when they are both eligible individuals as described above. However, each person's catch-up contribution must go to their own HSA account.

So hopefully, I have covered all the issues that may apply to your situation without totally confusing you.

[janettebournes]

spiritrider wrote:

The first person at Optum was not in error in the proper context. Each HSA account is only owned by one individual. However, once an HSA eligible individual opens an HSA account anyone can make a contribution to that account while staying within the limits. This can be the company, family members, friends, total strangers, etc…

Also, under the rules for married people, the spouse issued the HDHP family plan and the other covered spouse are both considered HSA eligible individuals, provided that the other covered spouse is not disqualified by other medical insurance. Therefore, they each can have their own HSA and the family plan contribution limit can be allocated anyway the spouses agree.

So technically, if your spouse was covered under your HDHP family plan, you could keep his plan and make direct deductible HSA contributions to his account. However, this would be unwise, because only the HDHP policyholder can make pre-tax/pre-FICA HSA contributions by payroll deduction. You would be giving up the ability to save FICA taxes on the HSA contributions. Also, any employer contributions would have to go to your account.

One thing to keep in mind. There is a $1,000 catch-up contribution when a person is >= age 55. This applies to both spouses when they are both eligible individuals as described above. However, each person’s catch-up contribution must go to their own HSA account.

So hopefully, I have covered all the issues that may apply to your situation without totally confusing you.

Click to expand...

Awesome explanation, thank you!!