Question

HSA/FSA Spouse

Forum|Forum|3 years ago
March 5, 2023
1 reply
0 views

I was recently married in September of 2022. My husband and I both changed jobs at the end of the year/beginning of 2023.

I enrolled in my own separate plan and full-purpose FSA. He enrolled in his own separate HDHP with HSA. Neither are family accounts, but my FSA does allow me to pay for his expenses. We file separately.

Is this allowed? If not, how can we fix it before the 2023 tax season?

Thanks.

M

Mike9241

Not Allowed

You can’t contribute to a Health Savings Account (HSA) and have a general purpose Health Flexible Spending Account (FSA) for overlapping months.
And, if you are married, your spouse can’t have a general purpose Health FSA at the same time either.
Just being eligible to have your medical expenses reimbursed from your spouse’s Health FSA disqualifies you from contributing to an HSA—regardless of whether you’re both on the same health plan or whether you actually get reimbursed from your spouse’s Health FSA.

Allowed

It’s ok to contribute to an HSA and a Limited Purpose FSA (used to pay for eligible dental and vision expenses).
It’s also ok to contribute to an HSA and a Dependent Care FSA (used to pay for eligible dependent care services such as preschool, summer day camp, before/after school programs, and child or elder care).

Pairing a Health Savings Account (HSA) with a Limited Purpose FSA and/or Dependent Care FSA increases the pool of tax-free funds you have available to pay for qualified healthcare expenses.

for both 2022 and 2023 if you have a general purpose FSA no HSA is allowed for any month you have an FSA even if you completely deplete the account. Talk to your employer. in 2023 you would need to drop out of the FSA plan, if that's even allowed, and spend all the funds. You would have to make sure that the FSA plan would not cover you or your spouse for the rest of 2023. generally, the plans provide for annual coverage and some are on a fiscal year

if your participation in the GP FSA were to terminate before 12/1/2023 and all funds expended (in other words the FSA doesn't cover you and thus him for December 2023), this is a rule he can use to contribute to his own HSA.

the last-month rule states that if he has HDHP coverage and no disqualifying coverage (like your FSA) on the first day of the last month of the year (generally December), then he can treat his annual HSA contribution limit as if based on a full year of HDHP coverage. he could use the full annual HSA contribution limit for Self-only, and not have to pro-rate the amount.

The bad news is that if he uses the last-month rule, then in the following year, he has to maintain HDHP coverage and have no disqualifying coverage for the entire year 2024 or pay a penalty. thus you could not have a GP FSA at any time in 2024.