From the Hotline: HDHP, Dependents, and Military Insurance

Question: Is an employee disqualified from making HSA contributions if she has a dependent on her HDHP while he is simultaneously covered by military insurance?

Answer: The short answer to your question is no, the employee may still have the Health Savings Plan (HSA) and make contributions.  The dependent’s non-HDHP coverage does not affect the employee’s eligibility, even if the employee is covering that dependent on the HDHP.  However, to be eligible for an HSA, an individual must be covered by a HSA-qualified High Deductible Health Plan and must not be covered by other health insurance that is not an HDHP. Presumably the parent has the employer-provided HDHP and HSA plan only.  The dependent’s military-provided health insurance (Tricare) is not considered HDHP coverage, so the dependent in that option is not eligible for an HSA.

The amount contributed to the HSA depends on the type of HDHP coverage, the age of the enrollee, the date the enrollee became an eligible individual, and the date the participant ceases to be an eligible individual. For 2014, if self-only HDHP coverage limits are $3,300 and for family HDHP coverage the limit is $6,550.

For more information visit: http://www.irs.gov/publications/p969/ar02.html#en_US_2013_publink1000204081.