Note: I am neither an accountant nor a lawyer. None of this constitutes tax or legal advice and is for informational purposes only. I have tried to make the information that follows as accurate as possible, but I can’t guarantee that it hasn’t changed since the last editing of this post. This information is based on my understanding of the applicable rules, regulations, and research.
In order to answer the question of if Tricare eligibility means you can’t have an HSA depends on whether or not you had an HSA before you became eligible for Tricare.
No HSA Before Tricare = Not Eligible(For Now)
If you did NOT have an HSA before you became eligible for Tricare, then you can’t have an HSA because you do not meet the eligibility requirements for opening an HSA.
HSA Before Tricare = You Can Keep It Probably Can’t Pay For Anything With It
If you had an HSA prior to being eligible for Tricare then you can still have that HSA while covered under Tricare. Just because you became eligible for Tricare doesn’t mean your HSA magically disappear.
However, just because you get to keep your HSA doesn’t mean that you can contribute to your HSA or use the funds in your HSA to pay for your Tricare copays.
In order to be able to contribute to your HSA you have to have a high deductible health plan and no other insurance among other things. As soon as you get Tricare, that automatically disqualifies you for contributing. The first year you have Tricare you will probably be eligible to contribute a portion of the maximum contribution, for the part of the year that you weren’t covered under Tricare, as long as you met all of the other requirements.
As far as paying for medical expenses with it once you have Tricare, that is an entirely different topic. You will be fighting a tough battle since everyone associated with Tricare is going to automatically assume that you can’t have an HSA since you are using Tricare and won’t realize that you had the HSA before you became Tricare eligible.
As a result of this, the rules and procedures probably haven’t been fleshed out in regards to this and you will receive an automatic “no”. The VA used to not allow you to use an HSA to make your VA copayments, but have since changed their policy and will allow you to use an HSA in some instances.
Tricare might follow along and allow the Tricare participants who had HSA’s before becoming Tricare eligible to make their copayments with their HSA, but there is not guarantee of this happening.
This is the exact scenario that I am going through now. My wife lost her job and now we have decided the using the TRICARE Retired Reserve until I hit 60 years of age and can go full Military Retired. TRICARE out of pocket expense for the year is only $3000 for family and $7000 for family with BCBS here in Pima County Arizona. Both have similar Premiums at around $1000 per month for the both of us. We currently have and HSA from her old job and were hoping that we could use it to pay our TRICARE Co-pays since we are anticipating some major health issues in 2015. Any further clarification of this issue would be greatly appreciated this is the only site that has even brought this up. Please advise.
Reid
Tucson, AZ
Hi Reid,
I apologize for the delay in replying to your comment. Back in 2013 the VA made changes and they started allowing people to pay their copays at the VA hospital using money from a health savings account. Also, they made changes to where they allowed the billing of a high deductible health plan for charges incurred for non-service connected disabilities. It is feasible that you would be able to pay the copays using the money in the HSA from her old job.
There are some areas I would need to know some more information on though. Was it a family HSA or was it an individual HSA? If it was an individual HSA for her, then I think she would only be able to pay for copays related to her visits. I’m not 100% certain on that, so you might have to do some more research.
I’m not sure if you’ve seen this other post on my site, but it talks about the VA and HSAs. If you read through the comments you can find some similar questions:
http://makelegitmoneyonlinenow.com/434/can-a-veteran-have-a-health-savings-account/
I hope this helps. If you have any further questions let me know and I will attempt to answer them.
Thomas
Hi Reid,
How did this ultimately work out for you? I’m a gray-area retiree (not yet 60). I have an HSA from my civilian employer. I’m still on my employer’s health insurance plan and actively contributing to my HSA account. Once I eventually switch over to Tricare, will I be able to use the money in my HSA to pay for copays, etc?
Thanks,
Jim (Phoenix, AZ)
Hi Thomas,
This has been a wealth of information and thanks for taking the time to post the replies. I have a situation where our family is on HDHP thru my employer. My husband is retired military and we also have Tricare. I do not use the HSA account because I am on the Tricare plan. Do you know if I am no longer enrolled in Tricare, can I start contributing to the HSA even though my husband and son would still be enrolled in the HDHP? I would use the HSA toward my medical bills only and not my son or husband’s bills. Thanks, Elizabeth
Hi Thomas,
This has been a wealth of information and thanks for taking the time to post the replies. I have a situation where our family is on HDHP thru my employer. My husband is retired military and we also have Tricare. I do not use the HSA account because I am on the Tricare plan. Do you know if I am no longer enrolled in Tricare, can I start contributing to the HSA even though my husband and son would still be enrolled in the HDHP? I would use the HSA toward my medical bills only and not my son or husband’s bills.
I apologize if this is a repeat message but it looks like the previous email did not get sent out.
Thanks, Elizabeth