Who can establish a Health Savings Account? I am self-employed with an IRA and SEP accounts. My health insurance is provided through my Husband's employer. My husband has a HSA through his employer. Can I, as a self-employed 1099 person also establish my own HSA?


Whether you can establish an HSA has nothing to do with your employment status or your retirement plan. It has to do with the type of medical insurance you have.

The insurance company should be able to tell you if your plan is "HSA compatible". To be HSA compatible, a plan must have a "high deductible" -- in 2014, $1250 for an individual plan or $2500 for a family plan. It must not cover any expenses before the deductible, that is, you cannot have any "first dollar" coverage for doctor's visits, prescription drug coverage, etc. (There are some exceptions for services considered "preventive care".) There are also limits on the out-of-pocket max. I think that's it, but the insurance company should know if their plans qualify or not.

If you have a plan that is HSA compatible, but also have another plan that is not HSA compatible, then you don't qualify.

And all that said ... If you are covered under your husband's medical insurance, and your husband already has an HSA, why do you want to open a second one? There's no gain. There is a family limit on contributions to an HSA -- $6,550 in 2014. You don't get double the limit by each opening your own HSA. If you have two HSA's, the combined total of your contributions to both accounts must be within the limit. If you have some administrative reason for wanting to keep separate accounts, yes, you can open your own, and in that case, you and your husband are each allowed to contribute half the limit, or you can agree to some other division.

I suppose you might want to have an account in your own name so that you control it, especially if you and your husband have different ideas about managing finances. (Though how to resolve such problems would be an entirely different question. Personally, I don't think the solution is to get into power struggles over who controls what, but whatever.) Maybe there's some advantage to having assets in your own name if you and your husband were to divorce. (Probably not, though. I think a divorce court pretty much ignores whose name assets are in when dividing up property.)

See IRS publication 969, http://www.irs.gov/publications/p969/index.html for lots and lots of details.

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  • Among other things, that publication says "Each spouse who is an eligible individual who wants an HSA must open a separate HSA. You cannot have a joint HSA." – Jeff Trull Mar 2 '16 at 18:59
  • @JeffTrull But you can pay your spouse's medical expenses from your HSA, and there is a combined family limit on contributions. – Jay Mar 2 '16 at 19:03

IRS Publication 969 gives all the details about HSA accounts and High Deductible plans:

According to your question you are covered by a plan that can have an HSA.

There a few points of interest for you:

Contributions to an HSA

Any eligible individual can contribute to an HSA. For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual.

Contributions to an HSA must be made in cash. Contributions of stock or property are not allowed.

That means that yes you could make a contribution to the HSA. Or if in the future you were the provider of the insurance you could have a HSA.

Limit on Contributions

For 2015, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage you can contribute up to $6,650.

It sounds like you have a family plan.

Additional contribution. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000.

Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2014 is $6,550. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division.

The rules for married people apply only if both spouses are eligible individuals.

If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,550. Each spouse must make the additional contribution to his or her own HSA.

Note: most of the document was written with 2014 numbers, but sometimes they mention 2015 numbers.

If both are covered under a single plan it should be funded by the person that has the plan. They may get money from their employer. They may be able to have the employer cover the monthly fee that most HSA administrators charge. The non employee can make contributions to the account but care must be taken to make ure the annual limits aren't exceeded.

HSA contributions from the employees paycheck may reduce the social security tax paid by the employee. If the non-employee is self employed you will have to see how the contribution impacts the social security situation for the couple.

If the non-employee is 55 or older it can make sense to throw in that extra $1000. The employer may not allow it to come from the paycheck contributions because they wouldn't necessarily know the age of the spouse, they may put a maximum limit based on the age of the employee.

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