Question: When both parents have medical coverage, may the employee’s dependent child be included under the father’s High Deductible Health Plan (HDHP) with a Health Savings Account (HSA), as well as the mother’s traditional plan?
Answer: Either parent, or both parents, may enroll the child for dependent coverage assuming the child meets the plan’s eligibility definition (e.g., under age 26). The child’s coverage, or type of coverage, will not affect the parent’s eligibility to make contributions to a Health Savings Account (HSA).
An employee may contribute to an HSA (or have employer contributions made on their behalf) if the employee meets all of the following HSA eligibility criteria:
- Has qualifying High Deductible Health Plan (HDHP) coverage;
- Does not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
- Is not entitled to Medicare; and
- Is not the tax dependent of another taxpayer.
For instance, if the father meets the above HSA eligibility criteria, and if his HDHP plan covers him and at least one dependent (the spouse or child or both), he may make HSA contributions up to the family limit. In Revenue Ruling 2005-25, the IRS clarified that an individual eligible to contribute to an HSA does not lose eligibility merely because the individual’s spouse (or child) has non-HDHP coverage.