HSA family contribution limit

[EBP]

I maintain HDHP family coverage that covers me, my 24-year-old daughter, and my husband. Coverage for my husband is secondary to Medicare (Medicare became primary in March of 2025). My 24-year-old daughter is a qualifying relative for 2025 and therefore I will claim her as a dependent on my 2025 tax return.

I contributed the full family contribution limit to my HSA for 2025 and plan to again for 2026. However, my husband's Medicare advisor recently told me that just because I have family coverage does not necessarily mean I can contribute the family contribution limit. If just my husband and I were in the HDHP, and he has coverage elsewhere (Medicare), my understanding is that I could only contribute the self-only limit. However, since my daughter is also covered, I was under the impression that I could contribute the family contribution limit.

I'm having trouble finding anything definitive that says whether a qualifying relative who is a child is treated differently from a dependent child (under age 19 or full-time student under 24) in this instance.

I'm hoping that @BrianGilmore in particular can answer whether I still qualified/qualify for the family contribution limit for 2025 and 2026. If not, I assume I'll need to withdraw money from my HSA for part of 2025 (would have qualified for the family contribution limit until my husband's Medicare became primary) and also lower my contribution for 2026 going forward, correct?

And a follow-up question - if I was still eligible to contribute the full family contribution amount for 2025, but it turns out that my daughter is not a qualifying relative for 2026 (that is, she makes over $5,050 for the year), and I have made the full family contribution amount for 2026 before I know that she is not a qualifying relative, is there a consequence (penalty) other than having to withdraw the overage from my HSA? In other words, should I take the safer approach of lowering my contribution to the self-only limit and possibly forego the tax savings associated with the higher contribution amount?

Thanks for any help!

 

[Brian Gilmore]

Hi there, good news--you can contribute up to the family HSA limit as long as you are HSA-eligible and have at least one other individual covered under the plan.  The other individual(s) covered do not have to be HSA-eligible for these purposes.  So the fact that your husband cannot establish and contribute to an HSA (because he is enrolled in Medicare) has no effect on your ability to contribute to the family max.

On the child matter, whether your child is a qualifying relative matters only as to whether you can take tax-free medical HSA distributions for that child (see here for more details: https://www.newfront.com/blog/the-hsa-distribution-rules-part-1).  It has no effect on contribution limits.

 

Here's the overview of your main issue--

IRS Notice 2004-50:

https://www.irs.gov/pub/irs-drop/n-04-50.pdf

Q-12. What is family HDHP coverage under section 223?

A-12. Under section 223(c)(4), the term “family coverage” means any coverage other than self-only coverage. Self-only coverage is a health plan covering only one individual; self-only HDHP coverage is an HDHP covering only one individual if that individual is an eligible individual. Family HDHP coverage is a health plan covering one eligible individual and at least one other individual (whether or not the other individual is an eligible individual).

Example. An individual, who is an eligible individual, and his dependent child are covered under an “employee plus one” HDHP offered by the individual’s employer. The coverage is family HDHP coverage under section 223(c)(4).

 

https://www.newfront.com/blog/the-hsa-contribution-rules-part-1

The HSA Contribution Limit: HDHP Family Coverage
HSA-eligible employees can contribute to the family limit ($8,550 in 2025) if they enroll in family HDHP coverage for the entire calendar year (or take advantage of the last-month rule, as outlined in Part II).

The HSA rules define family HDHP coverage as any coverage other than self-only coverage. This means that employees who are HSA-eligible and cover at least one other individual under the HDHP (e.g., employee + spouse, employee + domestic partner, employee + child(ren), employee + family) can contribute up to the family HSA limit.

The family HSA contribution limit is available regardless of:

• Whether the other covered family members are HSA-eligible (e.g., the family members may also be enrolled in non-HDHP coverage or Medicare); or
• Whether the other covered family members are eligible for tax-free coverage under the plan (e.g., non-tax dependent domestic partners).

Example 1:

• Ben enrolls in HDHP coverage for himself and his domestic partner Julianna for all of 2025 (and has no disqualifying coverage).
• Ben’s (non-tax dependent) domestic partner Julianna also has employee-only coverage under a non-HDHP HMO plan with her employer.

Result 1:

• Ben is eligible to make the full $8,550 family HSA contribution limit for 2025.
• The fact that Julianna is a non-tax dependent domestic partner and has other disqualifying coverage is irrelevant for purposes of Ben’s ability to contribute to the family HSA limit.

Note that Julianna cannot make or receive HSA contributions to an HSA in her name because she is not HSA-eligible.

 

Slide summary:

2026 Newfront Go All the Way with HSA Guide

[EBP]

Brian -

Thank you!! This is so helpful! And glad to see I'm on track here and can continue to contribute the family max for a few years yet.

Very much appreciate your time!