HSA's for children only

[bluemarlin08]

Some self employed people don't want to tie their money up in an account they can't touch except for medical expenses. With the changes in the law however, if they have medical expenses and need the deduction they can pay personally, then make a contribution to the HSA, then give the trustee the recipt and get reimbursed and get the deduction.

 

[GreenSky]

Some self employed people don't want to tie their money up in an account they can't touch except for medical expenses. With the changes in the law however, if they have medical expenses and need the deduction they can pay personally, then make a contribution to the HSA, then give the trustee the recipt and get reimbursed and get the deduction.

I've been recommending to my clients that have the cash flow and actually fund the account to not withdraw any money. Let everything grow tax free and reimburse themselves years later. That's exactly what I'm doing now (took me a couple of years to get smart).

Rick

 

[MHart]

Why would you want to do a child only HSA?

Situation is a 15 and 17 year old's for a family of four. Parent want some help with their group plan and the parents have preexisting conditions so they can't move to individual.

I have a 3500 deductible HSA in California where the price is 78 dollars for both of them. I can't beat that price on co-pay plans the price for the co-pay plans come in around 140 to 180.

 

[Crabcake Johnny]

I've lately been a fan of recommending carving out older kids to guarantee insurability. You take a 17 year old, have them get their own plan and now the parents can pay for that plan as long as they want.

They don't have to worry about finding student coverage through college or having them come off their plan at age 24. Even beyond that a lot of entry level jobs either don't have benefits or lacking group benefits. It's one less thing someone has to worry about when looking for a job.

 

[somarco]

Situation is a 15 and 17 year old's for a family of four. Parent want some help with their group plan and the parents have preexisting conditions so they can't move to individual.

I have a 3500 deductible HSA in California where the price is 78 dollars for both of them. I can't beat that price on co-pay plans the price for the co-pay plans come in around 140 to 180.

In that case it makes perfect sense.

 

[newmindfashion]

Marc,
They can still have an HSA compatible plan and simply not set up the HSA. Also, if the parents have an HSA compatible plan, they can still use their HSA to potentially pay for the kids deductibles on a pre-tax basis.

HSA compatible plans are good because of the simplicity and cost effectiveness of the policies. The HSA fund itself is gravy.

 

[CHUMPS FROM OXFORD]

I'm estimating that 80% of the HSAs I wrote within the last 12 months have included funds being deposited in the side account. That's the basis of the sale. This included the self-employed as well as families.

If they aren't making deposits, I'll ask why on the renewal.

 

[bluemarlin08]

I, too, am carving out the older children to preserve insurability, parents like the concept, I am doing it for my daughter.

 

[Guest]

For the situation where the parents are not eligible for HSA's (e.g., both parent's are covered by employer plans) and the child has a HDHP for child-only coverage:
- One of the eligibility criteria for an HSA is that you cannot be a dependent on someone else's tax return (see IRS website).
- A dependent child (or a parent for that child) cannot open, own, use or contribute to an HSA in this situation.
- A parent can still buy a high-deductible health plan for their child-only, but they cannot open up an HSA for their child in this situation.
JJ