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I want to find out if I can use Health Savings Account money…

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I want to find out if I can use Health Savings Account money for this. I have a 25 year old daughter for whom I pay her health insurance premium -- or I should say I pay my ex-husband her health insurance premium -- plus I pay whatever it doesn't cover for her. Can I use my H.S.A. account money for that or just for my own health-related bills?

Accountant's Assistant: The expert will know how to help. Is there anything else the expert should be aware of?

I no longer work at the company that was making H.S.A. deposits to that account from my paycheck. But I understand the H.S.A. account continues in the same way -- they just won't be facilitating anymore paycheck deposits.

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Answered in 3 minutes by:
8/14/2017
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,620
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello, my name is ***** ***** I will assist you in answering your HSA questions

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Your HSA money can be used toward insurance premiums, but only specific types, such as long-term care coverage, health coverage while you are unemployed, and federal health care continuation coverage, also known as COBRA. If you are 65 and older, HSA funds can also be used to pay for any health insurance, except Medicare Supplement policies.

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Regarding your daughters health insurance premiums, are you currently supporting your daughter?

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The IRS requires you to prepare Form 8889 and attach it to your tax return when you take a distribution from an HSA. However, if your 1099-SA indicates you did not use the distribution for qualified medical expenses, you will pay income tax on the portion you used for unqualified expenses.

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Customer reply replied 11 months ago
I'm supporting my daughter. She finished college in January and is now studying for the GRE. She lives at my house and I pay her bills, including her health insurance and unreimbursed medical expenses.
Are you sure I cannot pay day to day medical expenses out of my own H.S.A? Based on your answer, now I'm not even sure if I can do it for myself let alone my daughter. I have a very experienced tax accountant -- who happens to be away until September -- and he always said my H.S.A. money can in fact be used toward my day to day medical expenses. Is he wrong?

I was speaking specifically to health insurance premium payments from an HSA and not day to day expenses paid from a HSA

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Customer reply replied 11 months ago
my tax accountant fills out lots of forms like that. The operative term in your response is "qualified medical expenses" and I'm asking about what's considered qualified. You answered something about insurance premiums. I didn't ask about insurance premiums. I just looked on google and it said that the deductible is qualified. That's good, since I have a $1,500 deductible. I believe any other medical expenses for me that are not paid by my health insurance are also qualified. OK, I think I'm whole now from before I started this inquiry. But my question was about my daughter, whom I support, and I don't see the answer about that. I'm not asking about her insurance premium. I'm asking about her medical expenses that aren't paid by insurance. Are those expenses considered qualified for my H.S.A. account?

Wasn't your initial question concerning health insurance premiums?

"I have a 25 year old daughter for whom I pay her health insurance premium -- or I should say I pay my ex-husband her health insurance premium"

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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 return except that:

    1. The person filed a joint return,

    2. The person had gross income of $4,050 or more, or

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Insurance premiums. You can’t treat insurance premiums as qualified medical expenses unless the premiums are for:

  1. Long-term care insurance.

  2. Health care continuation coverage (such as coverage under COBRA).

  3. Health care coverage while receiving unemployment compensation under federal or state law.

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You are able to pay a dependents day to day medical expenses with funds from a HSA without penalty or including the payment in your income

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Customer reply replied 11 months ago
I can't remember if I took her as a deduction/reflected her as a dependent on my taxes last year. If I was able to I probably did.
Would I have been able to take her as a deduction, given that she's 25 and in school all last year making less than $4K?

Yes, as long as you or your spouse provided over 50% of her support and she did not file jointly( ie being married) with anyone else

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,620
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Chad EA, CDFA®, CFP® and 87 other Tax Specialists are ready to help you
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Customer reply replied 11 months ago
OK, thank you. Sounds like I can use my H.S.A. monies toward her medical expenses not covered by insurance, since she's a dependent. Thank you very much.
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