Among the many benefits (emotional, financial and otherwise) to getting married, favorable treatment when it comes to health insurance is one of them. Even if you or your spouse’s employer doesn’t chip in for dependent premiums, the monthly cost of a family plan is almost always lower than it would be to cover each individual separately.

In addition to the ability to share a family plan, getting married affords you another financial benefit: the ability to use your spouse’s HSA for your health costs. You don’t even have to share a health plan in order to access those funds, nor are you restricted to using deposits that accrued after you were married.

Here are the basic HSA rules as they apply to spouses and dependents.

Rule 1: Your annual contributions limit is based on who is covered under your high deductible health plan (HDHP)

The IRS sets annual contribution limits for HSAs based on whether you have an individual or a family account and health plan. If you have an individual HDHP as your health insurance, and your spouse has their own health insurance plan through another source, you can only contribute up to the individual contribution limits to your HSA. Even if your spouse is using your HSA for their qualified medical expenses.

Another thing to note: you can only contribute to your HSA as long as your HDHP is your only health insurance. If you have supplemental health insurance through your spouse’s plan, you are ineligible to contribute to your account while that coverage is still active. But even if you are ineligible to contribute, you have full access to use the contributions you’ve already made.

If you and your spouse have a family HDHP, then you can contribute up to the family contribution limit.

Rule 2: You can only use your HSA to pay for current qualified medical expenses

While you can use any savings you amassed prior to getting married to pay for your spouse’s current or future qualified medical expenses, you can’t use it to pay for anything in the past.

So, for example, if your spouse had knee surgery the year before you got married and if after you’re married, he or she is still paying off the medical bills associated with that surgery, you can’t use your HSA to pay for them. Any expenses for which you take a disbursement from your HSA must have been incurred after you got married.

Rule 3: All withdrawals for your spouse’s medical expenses are tax-free

As long as you use your HSA to pay for your spouse’s qualified medical expenses, those withdrawals remain tax-free. Just as they would be if you had withdrawn the money to pay for your own. If you’re under the age of 65 and use your HSA to pay for something that isn’t a qualified medical expense, you will have to pay income taxes on the withdrawn amount as well as an additional 20% tax penalty.

Rule 4: Once you turn 65, you can use your HSA on whatever you want

Once you turn 65, your HSA operates like a normal retirement account. That means you can use your money on whatever you want for you and your spouse. You just have to pay income taxes on the disbursed amount unless you use your money to pay for qualified medical expenses, which are always tax-free.

If your spouse is 65 but you’re aged 64 or under, and you are the owner of the HSA, you can still only use your savings to pay for qualified medical expenses. If you use your money for anything else, you’ll be subject to the 20% additional tax penalty.

How to increase your HSA balance faster

If you’ve just gotten married and all of a sudden there’s a whole other person or persons now utilizing your HSA, you might feel as though your annual contribution doesn’t go as far as it used to. Here are a couple ways to make sure you have the money you need for the expenses you have:

• Increase your annual contribution. If you’re not currently contributing up to the annual limit, consider maxing out your contributions if it’s within your budget.

• Add your spouse to your health plan. If you’re maxing out your annual individual contributions and feel like you need to save more money, consider adding your spouse to your HDHP. Even if they use the medical system frequently, the added tax-free money you could save might offset any additional cost.

• Invest your contributions. If you have an HSA like Lively that enables you to invest your contributions in the market, you should take full advantage of this offering. The stock market has an average annual growth of around 10% (the actual number varies from year to year), and the current average interest rate for savings accounts is around 0.06% (as of November 2021). By investing even half of your HSA contributions and leaving the rest for medical expenses, you can grow your money much faster than by having it sit in a savings account.

Whether you’ve just gotten married or you’ve been married for years, your HSA can be a great way to help pay for your spouse’s medical costs. If you want to open an HSA or find out more, get in touch with us at Lively.