Common Questions under the Health Care Reform Laws – Part 1

Larry Grudzien

Novmeber 23, 2010

What is the definition of an eligible dependent for an individual to receive tax free reimbursement under his or her Health Savings Account (HSA)? Has the definition changed under the new health reform laws?

The definition of eligible dependent for HSA-qualified medical expense purposes has been the same as the expanded definition of dependent that applies under Code Section 105(b) for health coverage purposes generally. This change was made retroactively effective to January 1, 2005. Before the health care reform laws, the same expanded definition of dependent applied  when determining qualified medical expenses for health FSAs, HRAs, HDHPs, and HSAs.

Code §223 was not, however, amended by the health care reform laws to add a provision allowing expenses for children under age 27 who are not Code §105(b) dependents, so unlike health FSAs, HRAs and HDHPs, HSAs cannot pay the expenses of such children tax-free.


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