How does getting married affect my HSA?

When you’re getting married, the issue of what happens to your Health Savings Account (HSA) is not exactly top of mind. With the whirlwind of celebrations and planning going on around you, this is completely understandable.

But soon after the festivities, you should take a fresh spin through how your health care insurance decisions as a married couple change your eligibility for an HSA. If you remain eligible, you will be able to contribute more into a family account for the future.

If you are looking to contribute more into a family HSA, be aware that the IRS determines eligibility and contribution limits once you are married differently than when you were a single tax-payer. Consult a tax professional or your HSA administrator to see how this affects your contribution limits.

Here are common scenarios that we’ve seen happen with HSAs after two individuals get married:

One spouse has an HDHP with an HSA and the other spouse will join that coverage.

When you change the coverage in your high deductible health insurance plan (HDHP) from single to family, the annual contribution limit changes from $3,500 to $7,000. That’s $7,000 combined for both of you. In 2020 the contribution limits will rise to $3,550 and $7,100. Anyone at least 55 years old can contribute an additional $1,000. If you are both 55 or older, you can add a total of $2,000 more to your contribution.

Your total contribution in the year you get married must be adjusted (pro-rated is the technical term) to account for the months you were single and the months you were married.

For example, let’s say a couple—both younger than 55 -- married in August. The spouse with the HSA thus will have 7 months under single coverage and 5 months with married coverage.

Here’s how to calculate this:

Step 1: Multiply the months under single coverage by $3,500: _

Step 2: Multiply the months under married/family coverage by $7,000 _

Step 3: Add the sums from Step 1 and Step 2 and divide by 12: __ Voila: That’s now your combined maximum contribution for the year.

Using our August example: 7 months x $3,500 = $24,500 5 months x $7,000 = $35,000

Total = $59,500; Divided by 12 = $4,958.

The $4,958 is the prorated contribution max for our couple that was married in August. The following year they are eligible to contribute the maximum. In 2020 that will be $7,100.

You both have your own HDHPS with HSAs and intend to keep separate coverage.

Some employers insist that working spouses who are eligible for coverage through their employer use that coverage, rather than join their spouse’s plan. If that’s the case, you can both keep contributing to your separate HSAs, but your combined annual max is $7,000 in 2019, not $14,000.

You have an HDHP/HSA, but your spouse keeps non-HDHP coverage.

If you are covered by your spouse’s non-HDHP plan you lose the right to contribute to an HSA. If you aren’t covered by a spouse’s non-HDHP plan, you can keep contributing to your HSA if your remain covered by an HDHP. If your HDHP just covers you, you can only contribute the single-coverage maximum ($3,500 in 2019), even though you are married. Money in your HSA can be used to pay for qualified health care expenses for you and your spouse.

You switch to a health insurance plan that is not an HDHP that covers both of you.

You can’t make any more contributions to your HSA for the year, but you can use the money in your HSA to cover qualified expenses for your spouse. You can choose to invest the money or use it for qualified medical expenses, but you are no longer eligible to contribute.