Q: My husband and I are contributing the annual HSA maximum each year but not reimbursing ourselves until after we’ve retired to maximize our investment return on this account. My college-aged son filled a prescription the other day and as I was recording it in my ledger, I realized that I may be requesting reimbursement for this expense when he is well over the dependent age of 26. Will I be able get reimbursement for the expenses he incurs (while under age 26) in the future even though he is over age 26 at the time of reimbursement?
A: The HSA rules for eligible dependents vary from those that apply to your health plan. While your son can remain on your health plan until the age of 26, the HSA rules are tied to tax dependency rather than age. So long as your son was your tax dependent at the time at the time the expense was incurred (even if he is not covered on your health plan), those expenses are eligible for future reimbursement. No one will question the expense if audited. However, once you stop claiming your son as a tax dependent, his expenses will no longer be eligible for your HSA account reimbursement. You may want to consider opening an HSA account for him after he is no longer a tax dependent if he is still enrolled on an HSA qualified high deductible health plan. You won’t be able to enjoy the tax savings, but he may benefit from having financial help with his medical, dental and vision out-of-pocket expenses.