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Many people believe they can open a joint Health Savings Account (HSA) with their spouse. However, HSAs are always individually owned. This blog post clarifies why joint HSAs do not exist and outlines some of the specific rules about HSAs for spouses.

Common Misconception: The “Joint HSA”
An HSA, unlike a checking account, cannot be co-owned. IRS rules require that each HSA have a single owner who meets the eligibility criteria. Even if you’re married and share most of your finances, the HSA must remain in one person’s name. There is no legal provision that allows two people to jointly own or manage a single HSA. This misconception is understandable, given how health and financial decisions are often managed together in a household. According to the IRS, an HSA can only have one owner: the individual who qualifies.

Individual Ownership of HSAs
HSAs are designed to be individually owned, and there are specific legal restrictions that prevent them from being joint accounts. Each spouse can have their own HSA, provided they meet the eligibility requirements, which include being covered by a high-deductible health plan (HDHP) and not having disqualifying coverage. Important note: If one spouse has a general-purpose Flexible Spending Account (FSA) that covers the entire family, it disqualifies the other spouse from contributing to an HSA. This is because the family-wide FSA is considered ‘other coverage’ under IRS rules, making the other spouse ineligible – even if they never use the FSA funds.

This individual ownership means that each spouse controls their own contributions, withdrawals, and investments. It also allows for separate account management, which can provide flexibility and potentially greater tax benefits when planning healthcare savings.

No Merging Spouses’ HSAs
Even after marriage, existing HSAs cannot be merged. If both spouses have HSAs, they must be managed separately. However, this doesn’t mean that spouses cannot benefit from each other’s accounts. Each spouse can use their individual HSA to pay for qualified medical expenses for themselves, their spouse, or any dependents. This way, both spouses can use their HSAs to cover family healthcare costs, but the accounts themselves remain distinct and independently managed.

How HSAs Work for Married Couples
Although HSAs cannot be joint accounts, married couples can still effectively use their separate HSAs to their advantage. If each spouse is covered under their own individual HDHP, each can contribute up to the individual HSA limit. However, if either spouse has family HDHP coverage (covering both spouses), then the maximum allowed contribution amount is the single-family limit for both HSAs combined per the IRS. You can divide this contribution limit however you like between the two accounts, but you cannot exceed the total family limit. For example, the 2024 HSA contribution limit for family coverage is $8,300. This would include the total amount a married couple could contribute to their HSAs. However, the contributions can be allocated however they choose.

Additionally, spouses aged 55 and older can make catch-up contributions of $1,000 annually to their own HSA. While each spouse has their own account, they can still use HSA funds to cover each other’s qualified medical expenses, providing flexibility in managing healthcare costs.

Important Considerations for Married Couples

  • Contribution Limits: The contribution limits for HSAs apply individually, meaning that each spouse can contribute up to the individual limit if they have their own HDHP. If covered under a family plan, the couple can contribute up to the family limit, split between the two accounts.
  • Tax Benefits: Each spouse can benefit from the tax advantages of their HSA, including tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
  • In the Event of Death: If an HSA owner passes away, their spouse, as a designated beneficiary, can inherit the HSA, which then becomes the spouse’s personal HSA.
  • Medicare Considerations: If you (the HSA owner) are under 65 and your spouse is enrolled in Medicare, it does not prevent you from contributing to your HSA, as long as you remain eligible under an HSA-qualified HDHP.

FAQs

  • Can spouses use each other’s HSA funds? Yes. Even though each HSA is individually owned, you can use your own HSA to pay for qualified medical expenses for yourself, your spouse, and your dependents. However, the accounts themselves remain separate – there is no “joint” HSA that both spouses own together.
  • Can one spouse transfer their HSA into the other spouse’s HSA? No. HSAs cannot be merged or transferred between living spouses. Each account stays with its individual owner. If the HSA owner passes away, the surviving spouse may inherit the account. In that case, the inherited HSA becomes the surviving spouse’s personal HSA, but it still cannot be combined with any existing HSA they may already have.