Can I Spend HSA Funds on My Spouse or Children?


One question that pops up fairly regularly is, “On whom can I spend my HSA funds?”. You have gone through all of the right steps of selecting HDHP coverage, opening an HSA, and making contributions to your HSA. You know that you need to spend you HSA dollars on qualified medical expenses, but whose medical expenses can be paid for with HSA dollars? In other words, we are defining what is a qualified medical expense, just the “who” part.

Luckily, there are three groups of people on whom can spend your Health Savings Account. In other words, these people receive benefits from your HSA, whether they are actually on your HSA insurance or not. Per IRS Publication 969:

Qualified medical expenses are those incurred by the following persons:

  1. You and your spouse
  2. All dependents you claim on your tax return
  3. Any person you could have claimed as a dependent on your tax return (see exceptions)

So while your family may not be covered by your HSA eligible insurance, they are at least covered by your HSA dollars.

You and your Spouse

Intuitively, we know that you can spend your HSA funds on yourself. Heck, you insured yourself, opened the HSA, contributed the funds; I sure hope you can spend it on yourself!

What is less known is your HSA contributions can be used on your spouse as well. This is especially true if you have self-only coverage: even if not covered by an HDHP, medical expenses spent on your spouse are considered qualified. The benefit is your spouse can consume medical care on a pre-tax bases. One partner can save funds in their HSA, and still allow the other to use those dollars.

In fact, the plan owner need not be present during the spouse’s medical spending, nor does it have to be spent with your specific HSA funds or debit card. Like all qualified medical expenses, he/she can spend with regular cash or credit card, and later reimburse themselves with pre-tax HSA dollars. Of course, in this scenario you will want to save receipts in something like to justify the expense / reimbursement, but it just shows the flexibility that Health Savings Accounts offer spouses.

Children and other dependents

In addition to your spouse, you can spend your HSA dollars on your family. This generally includes your children or any other dependents you can claim on your tax return. The IRS defines dependents as a qualifying child or relative, based on the IRS guidelines. So this could include a family member relation for whom you care. This is a great incentive for people with kids as it allows many of their medical expenses to be purchased with pre-tax dollars, which saves money. Medical expenses for your dependents count as qualified medical expense, so go ahead and use your HSA for those purchases.

People you could have claimed as dependents

The IRS includes wording that includes an additional category of people who could have been your dependents, but were not for varying reasons. The goal of this third group is to increase the people for whom spending counts as your qualified medical expenses. The IRS defines this group as:

Any person you could have claimed as a dependent on your return except that:

  • The person filed a joint return,
  • The person had gross income of $4,050 or more, or
  • You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s

So these are not true dependents but are “candidates” for dependents but were not for various reasons. For example, if your children have a gross income above a certain threshold, they may not be considered a dependent, but the IRS allows their expenses to be qualified medical expenses for your HSA. In a similar vein, if you or your spouse can be claimed as dependents on someone else’s tax return (e.g. younger couples), the IRS waives this and allows the qualified medical expenses to occur.

HSA spending for children of divorced parents

IRS publication 969 provide specific language on how qualified medical expenses for children of divorced parents is handled:

For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child’s exemption.

Basically, they again increase the universe of people that constitute a qualified medical expense. They do this by saying, “if the parents were separated for the last year’s last 6 months, the child counts as a dependent for both for HSA’s”. In other words, either parent can use their HSA dollars for their children even if they are divorced/separated and dependent status is up in the air. The other parent’s actions regarding dependent and taxation do not affect how the other parent treats the child for qualified medical expenses on their Health Savings Account. This is a good ruling by the IRS as it allows more benefits to divorced families / children when it comes to their medical care.


Note: if you need to keep track of HSA purchases for yourself, your spouse, or your children, please consider my service for your Health Savings Account record keeping. You can store purchases, upload receipts, and record reimbursements securely online.

TrackHSA logo

HSA Contribution with Upcoming Medicare Coverage

This question was submitted by HSA Edge reader Deb. Feel free to send in your question today to

I will be purchasing high deductible medical insurance on Sept. 1 of this year. I will qualify for Medicare on Sept. 1 of next year. Being that is only 11 months, would it be best to prorate the $3400 for 11 months for 2017 taxes in order to avoid a penalty, or would it be better to prorate each year (2017 and 2018) separately?

HSA’s and Medicare are very entangled as some of the Medicare rules can lead to over-contribution. I would urge you to further research this and apply it to your situation.

Please see my article: Medicare Part A Retroactive Coverage and HSA’s.

Basically, there is a clause in Medicare Part A that applies if you sign up for Medicare after your 65th birthday. In those cases, your Medicare coverage will retroactively apply up to 6 months prior to that date it truly began. Weird and crazy law. The problem is having Medicare coverage makes you HSA ineligible, so if you contributed to your Health Savings Account for those months it can lead to excess contributions.

Best case is this does not apply to your situation and your upcoming Medicare coverage truly beings on September 1st of 2018. Worst case it is will retroactively begin on March 1st, 2018.

As such, this limits your contribution amounts for 2017. I do not recommend using the Last Month Rule to contribute more in 2017, since you may end up failing the Testing Period in 2018 if Medicare kicks in. For 2017, you can safely contribute 4/12 (Sep Oct Nov Dec) of your contribution limit without issue. For 2018, you can contribute the pro rata amount of the months you have HSA insurance and do not have Medicare.


Note: if you need help determining your HSA contributions in light of Medicare coverage, please consider using my service to complete Form 8889. It is fast and painless, no matter how complicated your HSA situation. - complete HSA Form 8889 in 10 minutes!