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Health Savings Account (HSA) Rules for Spouses


Health Savings Accounts (HSAs) offer triple tax benefits. Contributions are tax-deductible, they grow tax-deferred and withdrawals are tax-free when used for eligible medical expenses. If you’re married, you might be wondering if you can use your HSA funds to pay expenses for your spouse. The short answer is yes, you can use your HSA for your spouse but there are some important rules to know.

A financial advisor can help you create a financial plan for your retirement needs and goals.

How a Health Savings Account Works

Health Savings Accounts are special savings accounts that allow you to set aside money for medical care. These accounts are associated with high deductible health plans, which you might be enrolled in through your employer or through the federal health insurance marketplace.

HSAs allow you to make contributions each year, up to a specified limit. The limit is based on whether you have individual or family coverage and are adjusted annually for inflation. Your employer can also contribute to your HSA on your behalf, though total employer-employee contributions cannot exceed the allowed annual limit.

Money in your HSA grows tax-deferred and you can withdraw it tax-free for qualified medical expenses. The IRS publishes a list of HSA-eligible expenses, which includes:

  • Acupuncture
  • Birth control
  • Dental treatment
  • Doctor’s office visits
  • Eyeglasses and vision exams
  • Lab fees
  • Orthodontics
  • Surgery

That’s a very short list of what’s covered, but it underscores what an HSA is meant to be used for.

Should you withdraw money from an HSA for anything other than eligible medical expenses, it’s treated as a taxable distribution. You’ll pay ordinary income tax on the money, plus a 20% withdrawal penalty. The 20% penalty goes away when you turn 65 but any non-medical withdrawals would still be subject to ordinary income tax.

One great thing about HSAs is that they’re not use it or lose it. Unlike a flexible spending account (FSA), any money left in your HSA at the end of the year rolls over to the next year. You can continue making contributions, allowing your money to grow, and only withdraw it when you actually need it to pay for health care.

Can I Use My HSA for My Spouse?

SmartAsset: Health Savings Account (HSA) Rules for Spouses

You can use money from your HSA to pay for your spouse’s medical expenses as long as those expenses fit into the IRS rules. The IRS allows you to use your HSA to pay for eligible expenses for your spouse, children or anyone who is listed as a dependent on your tax return.

That’s true whether you have individual coverage or family coverage with an HSA through your health plan. There are, however, a few rules to know:

  • You may only use your HSA to pay for qualified medical expenses for yourself, spouse, children or other dependents.
  • Using your HSA to pay qualified medical expenses for your spouse does not affect your annual contribution limit.
  • If you both have an HSA, your total contributions for the year cannot exceed the annual contribution limit for family coverage.

Again, qualified medical expenses are defined by the IRS. But if your spouse needs new glasses, for example, you could use your HSA to pay for them.

Paying medical expenses for a spouse out of your Health Savings Account doesn’t entitle you to a higher contribution limit. However, the total amount you can contribute as a couple is affected by which of you has an HSA.

If you both have a Health Savings Account through your respective health plans, the maximum you can contribute to your HSAs combined is the family contribution limit. That limit is $7,300 for 2022 and $7,750 for 2023. An additional $1,000 catch-up contribution is allowed for savers who are 55 or older. The individual coverage limits for 2022 and 2023 are $3,650 and $3,850, respectively.

Should I Use My HSA for My Spouse?

Health Savings Accounts offer multiple tax breaks so there’s no reason not to use them to pay for your spouse’s medical expenses if they’re qualified under IRS rules. Your HSA money could help to fill the gap if your spouse has health insurance that isn’t as comprehensive as yours, or they have a condition that requires higher out-of-pocket costs.

When using an HSA to pay for health care expenses, the first rule is to know what you can and can’t use the money for. Cosmetic surgery, for instance, doesn’t make the cut. Beyond that, however, you may want to create a personalized strategy for making the most of the money.

For example, your HSA may give you the option to invest in mutual funds, index funds or exchange-traded funds. Since you’re already getting a tax break you may choose to hold investments in your HSA that are less tax-efficient, while leaving something like an ETF in your brokerage account.

It’s also important to coordinate which expenses you’ll pay with your spouse, particularly if they have health insurance or an HSA of their own. The more money you can leave in your account, the more opportunity it has to grow.

That could be valuable later if you need health care for chronic conditions as you get older, or if you end up needing long-term care in retirement. If you don’t have a long-term care insurance policy in place, you could use your HSA funds to cover qualified costs. Remember, Medicare won’t pay for long-term care.

How to Make the Most of Your HSA

If you have access to a Health Savings Account, it’s important to make sure that you’re getting the most out of it. Some of the ways you can do that include:

  • Contributing up to the allowed limit each year
  • Choosing the right investments for your contributions
  • Withdrawing money only for qualified medical expenses
  • Using the money to pay expenses for eligible people (i.e., yourself, your spouse or dependents)

It’s also a good idea to keep receipts for any medical expenses you pay using your HSA. Should the IRS audit your tax return, you’ll have a paper trail documenting how the money was used.

What if you don’t have an HSA? You may be eligible to enroll in one if you have a high-deductible health plan. If you’re self-employed, you may be able to purchase a high-deductible health plan through the health insurance marketplace. And if you decide to change employers at some point, it’s possible that you may have the option to enroll in an HSA under your new health plan.

Bottom Line

SmartAsset: Health Savings Account (HSA) Rules for Spouses

Health Savings Accounts are often an under-appreciated way to save money on a tax-advantaged basis. While this type of savings account is not specifically designed for retirement, it could double as a retirement fund if you stay healthy. Just remember to consider the tax consequences of making withdrawals for anything other than health care expenses.

Retirement Planning Tips

  • Consider talking to your financial advisor about the best way to use your HSA if you’re married. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you’d like to save specifically for retirement, then you might consider opening an Individual Retirement Account. Like HSAs, IRAs offer tax benefits to savers. With a traditional IRA, you can enjoy tax-deductible contributions. A Roth IRA, meanwhile, allows for tax-free withdrawals in retirement. You can open either type of account at an online brokerage to start growing retirement wealth.

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