How do the annual maximum Health Savings Account (HSA) contribution limits apply to an eligible individual with family High-Deductible Health Plan (HDHP) coverage for the entire year if the family HDHP covers spouses or dependent children who also have coverage by a non-HDHP (e.g. Medicare, Medicaid, HMO)?

The eligible individual may still contribute the statutory maximum for family coverage ($6,550 for 2014) provided they are not also covered by a non-HDHP. Other coverage that the dependent children or spouse have does not affect the ability to make the family contribution limit.

In general, as long as there is a HDHP that covers two or more family members for the entire year, then the maximum family contribution can be made for the year even if just a single family member meets the qualifications to establish and make contributions to a HSA.

Example: Employee A has a HDHP through his employer and meets the criteria of establishing an HSA. Employee A also covers his spouse under the HDHP plan for the entire year. During the middle of the year the spouse also signs up for Medicare. Employee A is still able to contribute the statutory maximum for family coverage for the year.

IRS notice 2008-59 (Q&A #16) provides clarification to this situation.

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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice.