How Much Families Can Contribute to a Health Savings Account

You and a spouse can contribute a total of $6,900 to an HSA in 2018, plus a catch-up contribution if you’re 55 or older. And thanks to a quirk in the law, an adult child covered under the family’s high-deductible health policy may also be able to contribute $6,900 to his or her own HSA.

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Question: I picked a high-deductible health insurance policy for 2018 that covers my whole family. How much can I contribute to an HSA in 2018? Can my wife also contribute to an HSA, or am I the only one who can make the contribution because the HSA is through my work?

Answer: Because your HSA-eligible policy covers your family, you’ll be able to contribute up to $6,900 to an HSA in 2018. People with individual coverage can contribute up to $3,450 in 2018. If you or your spouse are 55 or older, you can each contribute an extra $1,000.

When you have family coverage, you and your spouse can divide your $6,900 contribution however you’d like. You can contribute the full $6,900 to your own HSA, or you and your wife can each contribute $3,450 to your own accounts, or any variation that equals $6,900. (If you each had individual health insurance coverage rather than a family plan, you would each have a separate $3,450 limit.)

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HSAs are owned individually, not jointly, but you can use the money tax-free for your own, your spouse’s and your dependents’ medical expenses—regardless of which spouse’s account you tap. Kevin Robertson, chief revenue officer at HSA Bank, which administers such accounts, says that the most common scenario is for one spouse to contribute the full amount for family coverage to his or her own account. That’s because it’s simple and most accounts are opened through an employer. Contributing to the HSA through your employer lets you use payroll deductions to make pretax HSA contributions. That gives you the added benefit of avoiding Social Security taxes on your contributions, in addition to allowing you to bypass income taxes on the money. Plus, your employer may match your contributions.

Your spouse will need to open a separate HSA, however, if he or she is 55 or older and wants to make a $1,000 catch-up contribution, says Robertson. Under the current law, each spouse can only make a catch-up contribution into his or her own account, although some of the health-reform proposals going through Congress earlier this year would have changed that rule.

Another interesting quirk of the HSA law is the contribution limit for adult children covered by a family policy. Young adults can stay on their parents’ policy until age 26. If they’re covered by an HSA-eligible family policy and aren’t tax dependents (and don’t have any other coverage that disqualifies them), they can contribute up to $6,900 apiece to their own HSAs – in addition to the $6,900 that their parents can contribute. However, because the adult child is no longer a tax dependent, the parents can’t use their HSA funds tax-free for the adult child’s eligible medical expenses; the adult child would need to use his or her own HSA funds for that, says Roy Ramthun, president of HSA Consulting Services. (Adult children who are covered by an individual policy, rather than their parents’ family policy, can only contribute up to $3,450 to their HSA for 2018.)

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.