IRS, Treasury Issue HSA Guidance for Spousal Contributions

April 13, 2005 ( - The Treasury Department and Internal Revenue Service (IRS) have confirmed that an individual can be eligible to contribute to a Health Savings Account (HSA) even if their spouse has nonqualifying family coverage.

>According to press releases from both agencies, Revenue Ruling 2005-25 Section 223 allows “eligible individuals” to contribute to such accounts. Generally, such individuals are covered by a high deductible health plan (HDHP) and no other health plan. However, the ruling concludes that a married individual may contribute to an HSA even though his or her spouse has non-HDHP family coverage, so long as the individual is not covered by the spouse’s non-HDHP.

“Steve and Mary Jones are married with three children,” according to an example provided by the IRS. “Steve has a low deductible family health plan that covers him and the   Jones children.  His plan does not qualify for an HSA.  The ruling   clarifies that Mary, who is not covered under Steve’s family plan, mayhave her own separate high-deductible health plan that does qualify for an HSA.”

The ruling also clarifies how much an eligible person can put into an HSA account in such a situation. According to the IRS,  the maximum contribution limit for this year is the lesser of the annual HDHP deductible (minimum of $1,000 for self-only coverage and $2,000 for family coverage) or $2,650 for self-only coverage or $5,250 for family coverage.

>The official guidance is available  here .