HSAs are sooooo much more flexible than traditional health insurance when it comes to dependants.
CRA allows for your tax free HSA funds to be used for any person related by blood, marriage, or law who is financially dependant upon you, the Member!
Who does that include?
- step children
- and more...
The key is that the individual(s) must be financially dependant upon you in order to qualify.
For a common-law spouse to qualify as a dependant, you must have cohabitated (lived together) for the last 12 consecutive months.
Determining eligibility for claims
While in most cases, your dependant will be eligible on your HSA when you become eligible, some won't be so it's important to be specific when adding dependants.
We don't make that assumption and neither does our system. It is important to get eligibility right in the case you are subject to a review or audit by CRA. Remember that HSA funds contributed to your account are not taxed. So CRA dictates eligibility.
Here's some example scenarios where a dependant wouldn't be eligible on your start date:
The effective start date on your Health Spending Account for a new baby or adoptive child would be the happy date they joined your family.
The effective date for a new spouse (congrats!) would be your wedding date.
Your HSA may have started when you had been living with your common law spouse for 6 months. That individual won't be eligible as a dependant until they meet the 12 month test. CRA wants to see some stick-to-it-iveness.
When adding dependants in your online Member Centre, please be sure to enter the Effective date.
If you don't add a date, our system will use the date entered and will define eligibility based on that.
If you entered the wrong date, you'll need to let us know so that we can change it for you because we'll need a justified reason for changing it in the paper trail. Simply submit a support request or email us at email@example.com. Yeah CRA's rules create work for both of us!
If something changes in your life and a dependant should no longer be effective, you can deactivate them.