Health Savings Account funds can pay the qualified medical expenses of three people: you, your legal spouse, and anyone who counts as your tax dependent. For HSA purposes the IRS uses a looser version of its dependency test than it applies elsewhere in the tax code, which is why an adult child with a full-time salary or a live-in partner earning well above the usual dependent income cap can still have their bills paid from your account. The question of who can use HSA funds turns on federal tax status, not on who is listed on your insurance.
Yourself
The account holder is always covered. Every distribution you take for your own qualified medical expenses comes out tax-free. To have opened and contributed to the HSA in the first place, you needed HDHP coverage, no Medicare enrollment, and no one else entitled to claim you as a dependent.1Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts Once the money is in the account, you can spend it on your own care regardless of what your coverage looks like later.
Your Legal Spouse
If you are legally married, your HSA can pay your spouse’s qualified medical expenses tax-free. Your spouse does not need to be on your HDHP and does not need any particular kind of insurance at all.1Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts Federal tax law decides who counts as a spouse, based on whether you were legally married on the last day of the tax year, or on the date of death if your spouse died during the year.2GovInfo. 26 USC 7703 – Determination of Marital Status
You can pay a spouse’s bill directly from the HSA or pay out of pocket and reimburse yourself. Either works, as long as the expense was incurred while you were married and qualifies as a medical expense. Using HSA funds for someone who does not meet the federal definition of spouse turns the withdrawal into taxable income and can add a 20% penalty on top.
Your Dependent Children
A child who qualifies as your dependent under federal tax law can have their medical bills paid from your HSA. The child must live with you for more than half the year and must not provide more than half of their own financial support, and must be under 19 at the end of the year, under 24 if a full-time student, or any age if permanently and totally disabled.3Office of the Law Revision Counsel. 26 USC 152 – Dependent Defined
There is no income limit for a qualifying child. A teenager with substantial summer wages still qualifies as long as they do not cover more than half their own support. Whether the child is on your HDHP, on another insurance plan, or uninsured has no effect on your ability to reimburse their medical bills.
Divorced or Separated Parents
When parents are divorced, legally separated, or have lived apart for the last six months of the year, the IRS treats the child as the dependent of both parents for medical expense purposes. That holds regardless of which parent claims the child on their tax return.4Internal Revenue Service. Medical Expenses – IRS Courseware Either parent can pay the child’s medical bills tax-free from an HSA. It is one of the few places where the tax code lets two taxpayers treat the same person as a dependent at the same time.
Adult Children Past the Age Limit
The Affordable Care Act lets a child stay on a parent’s health plan until age 26. That insurance rule does not carry over to HSAs. What matters for the HSA is whether the child still meets a dependency test under the tax code.
Once a child ages out of qualifying child status (19 in general, 24 for full-time students), there is a second path: the child may still count as a “qualifying relative” for HSA purposes. The statute that defines HSA-qualified medical expenses waives the gross income test that normally applies to qualifying relatives.1Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts A 25-year-old earning a full salary can still have their bills paid from your HSA, provided you supply more than half of their total financial support for the year.
If the adult child covers most of their own support, they do not qualify under either path. Using HSA funds for their expenses becomes a taxable distribution reported on Form 8889, subject to income tax and the possible 20% penalty.5Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
Domestic Partners, Parents, and Other Qualifying Relatives
The qualifying relative path is what lets an HSA cover people who are not your spouse or child: an unmarried partner, an aging parent, another household member. Under the general dependency rules, a qualifying relative must have a specified relationship to you or live in your household all year, must have gross income below a threshold ($5,050 for 2026), must receive more than half their support from you, and cannot be the qualifying child of another taxpayer.3Office of the Law Revision Counsel. 26 USC 152 – Dependent Defined
For HSAs, the gross income test is waived.1Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts Two conditions still have to hold: the person lived in your household for the entire calendar year, and you provided more than half of their total financial support. Meet both, and their earnings do not disqualify them.
Federal tax law does not treat a domestic partnership as a marriage, so a partner cannot use the spousal rule. The qualifying relative path is the only route, with the household and support requirements attached.
What Happens When You Pay for Someone Who Doesn’t Qualify
A distribution used for a non-qualified expense, or for a person who does not fit any of the categories above, gets pulled into your gross income and hit with a 20% additional tax.5Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans Between income tax and the penalty, you can lose 40% or more of the withdrawn amount.
The 20% penalty is waived in three situations, though the regular income tax still applies:6Internal Revenue Service. Instructions for Form 8889
- You are 65 or older. After that age, non-qualified distributions are taxed as ordinary income with no penalty, so the HSA functions like a traditional retirement account.
- You are permanently and totally disabled.
- The distribution goes to a beneficiary after the account holder’s death.
Fixing a Mistake
If you took money out and later realized the person did not qualify, you can return the funds and undo the tax hit. The repayment has to happen by the tax filing deadline (not counting extensions) for the first year you knew or should have known the distribution was a mistake.7Internal Revenue Service. Instructions for Forms 1099-SA and 5498-SA The returned amount is not treated as a new contribution, so it does not eat into your annual limit. Your HSA trustee is not required to accept a mistaken-distribution return, so confirm with the provider before you rely on this fix.