Medical Bills Adult Children ages 18 - 26

[oped]

So.  There is a longer story here but lets just zero in on the point I'm wondering about. I'll do my own calls and research, but wondering if anyone has experience...

My son is 20.  Is he responsible for his own medical bill because he is an adult?  What if he is still on a family plan?  Am i in any way a guarantor for an adult child? 

I feel a test that was ordered was not medically necessary and they are billing him 3K for the test.  At first they didn't even want to talk to me because, adult...  eventually they did, but that made me wonder... AM I responsible at all for this?  If not, at his income level he would qualify for their financial hardship program... but wouldn't that be a weird loophole?  

Anyone know about this kind of thing? 

[NomoreDramaQ1015]

Shouldn't be.  When I was 19 and still on my parents insurance they billed me directly AND sent me to collections three years later over a $12 bill they never sent.

From what I was told once I was 18 I'm an adult even if I was still on my parents insurance.

[wvugurl26]

I had the balance on an echocardiogram written off when I was in college. I was under my dad's plan. It was covered but we owed x%. My dad said he'd make payments and they said I was responsible. He said she's my dependent, blah blah. I had to go fill out paperwork and they wrote it off.

[hoops902]

You shouldn't be responsible for his medical bills (even if he's under your insurance) unless you specifically signed up to be his guarantor.  He is no longer your child that you are financially responsible for, he just happens to be of an age and eligible to still remain on your insurance.  The insurance and the cost of uncovered medical procedures can be practically separated for something like this.  

[oped]

Ok. So if they decide the test was medically necessary (I talked to the bigwig in billing this morning, and they froze the billing until it could be investigated) then I'll have him go in and apply for their financial need program, if he is responsible for a 3K bill making 5K last year he should qualify... 

But it does seem shady somehow... that he has a separate deductible under my plan, but if we go based on his income he would be very unlikely to ever NOT qualify for hardship while in school... same with his sister....

I'll take it if it works out that way though, in this case at least 

[plugginaway22]

Yes he is responsible, no you are not.  We won't talk to parents of patients over 18 unless the patient has signed HIPAA waivers to allow us to discuss billing and medical info.

[bean29]

I guess I am just an idiot, because I have always paid the co-pays for my kids while they are in college. It never occurred to me if I declared them independent - and they were covered under my health insurance, they could still duck out of any co-pays that were due.

ETA my DD has been independent on her taxes for several years.  Her income is at least $11,000 though.

[hoops902]

Dec 2, 2019 15:47:10 GMT -5 bean29 said:

I guess I am just an idiot, because I have always paid the co-pays for my kids while they are in college. It never occurred to me if I declared them independent - and they were covered under my health insurance, they could still duck out of any co-pays that were due.

ETA my DD has been independent on her taxes for several years.  Her income is at least $11,000 though.

Do they let you duck out of copays for financial hardship programs?  

[oped]

I pay their co pays (60 and 85).   I paid for things like his $800 blood test earlier this year, that I requested.  Hell I pay the therapist that doesn't even go to the deductible. We have a high deductible plan. 7K each/14K Family.  This is a bit of a different thing in my book.  

Yes, if they decide to go through with the charge, then i'll do the financial hardship thing... honestly my plan was to tell them its going to collections unless they settle anyway, so ... 

I don't think its a matter of 'declaring them independent' ... i think its a matter of financial responsibility under the law. 

I don't know hoops... the thing is that it says they will see if they were eligible for medicaid... but they won't be, because they have insurance and my income would keep them off medicaid, but theirs would leave them unable to pay such a large bill... so its a weird catch in the middle.

Kind of like if you have an 18 year old and a family HSA... you and the kid can each put in the full family amount even though its the same policy. Its one of those weird overlap areas that doesn't quite work out right...

[Deleted]

Dec 2, 2019 16:11:27 GMT -5 oped said:

Kind of like if you have an 18 year old and a family HSA... you and the kid can each put in the full family amount even though its the same policy. Its one of those weird overlap areas that doesn't quite work out right...

Wait.  What?  I'm intrigued.   I could open an HSA for DS next year after he turns 18 if he's on my HDHP? 

[hoops902]

Dec 2, 2019 16:18:13 GMT -5 minnesotapaintlady said:

Dec 2, 2019 16:11:27 GMT -5 oped said:

Kind of like if you have an 18 year old and a family HSA... you and the kid can each put in the full family amount even though its the same policy. Its one of those weird overlap areas that doesn't quite work out right...

Wait.  What?  I'm intrigued.   I could open an HSA for DS next year after he turns 18 if he's on my HDHP? 

Yes, he can have an HSA.  He is covered under an HDHP, and he's an adult so he won't be covered under YOUR HSA.

[oped]

Dec 2, 2019 16:18:13 GMT -5 minnesotapaintlady said:

Dec 2, 2019 16:11:27 GMT -5 oped said:

Kind of like if you have an 18 year old and a family HSA... you and the kid can each put in the full family amount even though its the same policy. Its one of those weird overlap areas that doesn't quite work out right...

Wait.  What?  I'm intrigued.   I could open an HSA for DS next year after he turns 18 if he's on my HDHP? 

Yep.  I was so bummed that I haven't been able to find a HDHP that is HSA eligible since son turned 18... it was always my plan... what an awesome way to invest for decades tax free on both ends...

[teen persuasion]

Dec 2, 2019 16:18:13 GMT -5 minnesotapaintlady said:

Dec 2, 2019 16:11:27 GMT -5 oped said:

Kind of like if you have an 18 year old and a family HSA... you and the kid can each put in the full family amount even though its the same policy. Its one of those weird overlap areas that doesn't quite work out right...

Wait.  What?  I'm intrigued.   I could open an HSA for DS next year after he turns 18 if he's on my HDHP? 

The important detail is dependency (IRS, not FAFSA rules).

If the child is not your dependent, then you cannot pay their bills out of your HSA, but they are eligible for their own HSA. If they are on your family HDHP, they are eligible to contribute to the family max in their own HSA to cover their medical expenses.

IRS dependent rules are all about earnings and who pays expenses. You don't get to decide if a child is your dependent or not, you follow the flow chart to determine who paid the majority of the child's expenses.

[bobosensei]

Not having much income as a college student isn't the same as being indigent.  My friend had hospital bills waived for emergency care when he was unemployed, and they really dug into his business.  I think he sent 40+ pages of documentation including all his bills and bank statements and had to explain every deposit that was in his account.  He had to send a certain number of tax returns too.

[Deleted]

Dec 2, 2019 21:04:51 GMT -5 teen persuasion said:

Dec 2, 2019 16:18:13 GMT -5 minnesotapaintlady said:

Wait.  What?  I'm intrigued.   I could open an HSA for DS next year after he turns 18 if he's on my HDHP? 

The important detail is dependency (IRS, not FAFSA rules).

If the child is not your dependent, then you cannot pay their bills out of your HSA, but they are eligible for their own HSA. If they are on your family HDHP, they are eligible to contribute to the family max in their own HSA to cover their medical expenses.

IRS dependent rules are all about earnings and who pays expenses. You don't get to decide if a child is your dependent or not, you follow the flow chart to determine who paid the majority of the child's expenses.

Well, so much for that then.  Although, I do think that dependency thing can get to be a little hairy.  Are scholarships and grants considered to be money contributed by the student towards their own expenses?  

[oped]

Dec 2, 2019 21:04:51 GMT -5 teen persuasion said:

Dec 2, 2019 16:18:13 GMT -5 minnesotapaintlady said:

Wait.  What?  I'm intrigued.   I could open an HSA for DS next year after he turns 18 if he's on my HDHP? 

The important detail is dependency (IRS, not FAFSA rules).

If the child is not your dependent, then you cannot pay their bills out of your HSA, but they are eligible for their own HSA. If they are on your family HDHP, they are eligible to contribute to the family max in their own HSA to cover their medical expenses.

IRS dependent rules are all about earnings and who pays expenses. You don't get to decide if a child is your dependent or not, you follow the flow chart to determine who paid the majority of the child's expenses.

I'm sorry I'm confused. Are you saying adult children can't open an HSA if they aren't paying the majority of their expenses... because that is not how I understand the rules.... 

I do see that dependent adult children can still be covered by the parent HSA, but I don't see any specific rule that says a dependent adult child can't open his OWN HSA as long as he is covered under HSA eligible policy. 

[teen persuasion]

Dec 2, 2019 21:42:52 GMT -5 minnesotapaintlady said:

Dec 2, 2019 21:04:51 GMT -5 teen persuasion said:

The important detail is dependency (IRS, not FAFSA rules).

If the child is not your dependent, then you cannot pay their bills out of your HSA, but they are eligible for their own HSA. If they are on your family HDHP, they are eligible to contribute to the family max in their own HSA to cover their medical expenses.

IRS dependent rules are all about earnings and who pays expenses. You don't get to decide if a child is your dependent or not, you follow the flow chart to determine who paid the majority of the child's expenses.

Well, so much for that then.  Although, I do think that dependency thing can get to be a little hairy.  Are scholarships and grants considered to be money contributed by the student towards their own expenses?  

Yeah, hairy is definitely the word for the dependency tests.

Scholarships are specifically excluded from the total support number.  That's what makes it so tricky.  Loans are included in the child's income, but scholarships are left out of the equation.

I especially like the IRS example where the child buys a car with $4500 of his savings, while the parents spend $4k on his support.  Since the $4500 he spent is greater than 50%, he is not a dependent.  But if you actually go thru the total support worksheet, you have to add in fair rental value for your home (divided by # people), food (divided by # people), actual expenses for the child like clothes, etc....  Just the fair rental value stuff generally swamped their earnings/self-spending, so my kids stayed my dependents as long as they were considered living with us (dorm living is considered living at home, just temp away from home).  So I considered them independent when they moved off campus and had apartments they rented year round, and paid for themselves.  Some kids that was at 19, some 21/22.

There's also the whole qualifying child vs qualifying relative distinction.  It's pretty blurry to me, but the rules and steps are slightly different as to what's included and what's not.

Once they are not dependents, parents can't claim the AOTC, but tax SW often says the child can't claim the refundable part, either if their income isn't high enough.  IDK exactly the issue, just remember it's easier to claim for the parents somehow.


It's messy.

[teen persuasion]

Dec 2, 2019 21:54:16 GMT -5 oped said:

Dec 2, 2019 21:04:51 GMT -5 teen persuasion said:

The important detail is dependency (IRS, not FAFSA rules).

If the child is not your dependent, then you cannot pay their bills out of your HSA, but they are eligible for their own HSA. If they are on your family HDHP, they are eligible to contribute to the family max in their own HSA to cover their medical expenses.

IRS dependent rules are all about earnings and who pays expenses. You don't get to decide if a child is your dependent or not, you follow the flow chart to determine who paid the majority of the child's expenses.

I'm sorry I'm confused. Are you saying adult children can't open an HSA if they aren't paying the majority of their expenses... because that is not how I understand the rules.... 

I do see that dependent adult children can still be covered by the parent HSA, but I don't see any specific rule that says a dependent adult child can't open his OWN HSA as long as he is covered under HSA eligible policy. 

Hmm, interesting distinction.  Can a tax dependent open and fund their own HSA, too?  Googling, I found this that says no:  

Thirdly, regardless of what kind of health insurance coverage you have, you can't open an HSA if you can be claimed as a dependent by your parents.

The person in that link was 24, so was no longer a dependent because they failed the age test.  I was talking about income and support tests for the 18 yo college student scenario specifically.

[oped]

I’ll ask my accountant to clarify but if that’s true then I guess the plan wouldn’t have worked anyway. I wonder if this has changed recently? Thanks.

[hoops902]

I'm pretty sure to have an adult child open an HSA they have to be independent for tax purposes.  If they are a dependent, then you can continue paying their bills from the parental HSA.  Essentially you get one HSA per person that they qualify for.  A dependent child qualifies to have bills paid from the parental HSA, and therefore cannot open their own.  An independent child does not qualify for the parental HSA, and therefore can open their own even while under the parental insurance.

[Deleted]

Oh well, it's probably for the best. It's not like I could really afford to save in his HSA as well as mine anyhow, but I'd probably kill myself trying.  

Finances with college kids is very complicated. 

[teen persuasion]

Dec 3, 2019 9:00:42 GMT -5 hoops902 said:

I'm pretty sure to have an adult child open an HSA they have to be independent for tax purposes.  If they are a dependent, then you can continue paying their bills from the parental HSA.  Essentially you get one HSA per person that they qualify for.  A dependent child qualifies to have bills paid from the parental HSA, and therefore cannot open their own.  An independent child does not qualify for the parental HSA, and therefore can open their own even while under the parental insurance.

I think you are correct that an adult child must be independent to open their own HSA.  I'm not sure that your reasoning is quite right, though.

I know you can have more than one HSA (just like you can have multiple IRAs), but the contribution limit is for you, not per account.  You could have one account for your employer to contribute to thru payroll, and transfer out to a Fidelity HSA for investing.

A couple could each have their own HSA, and split the contributions between them as they see fit.  After age 55, catch up contributions can only go into the individual's HSA, so if we wanted to take advantage of the extra $1k each in contribution space, I'd have to open an HSA in my name to contribute my $1k; I can't put it in DH's existing HSA, though he can lump his regular and catch up contributions together.  In our case, all insurance is thru DH's employer.  I believe the medical expense reimbursements could come from any of these (hypothetical) accounts for either of us, just not for our adult independent children's expenses.


They made the rules convoluted, probably not on purpose, but because the different moving parts intersect badly and get changed frequently by congress.  The rule seems to be best stated as: dependents can't open their own HSA, period. 

[hoops902]

Dec 3, 2019 9:27:15 GMT -5 teen persuasion said:

Dec 3, 2019 9:00:42 GMT -5 hoops902 said:

I'm pretty sure to have an adult child open an HSA they have to be independent for tax purposes.  If they are a dependent, then you can continue paying their bills from the parental HSA.  Essentially you get one HSA per person that they qualify for.  A dependent child qualifies to have bills paid from the parental HSA, and therefore cannot open their own.  An independent child does not qualify for the parental HSA, and therefore can open their own even while under the parental insurance.

I think you are correct that an adult child must be independent to open their own HSA.  I'm not sure that your reasoning is quite right, though.

I know you can have more than one HSA (just like you can have multiple IRAs), but the contribution limit is for you, not per account.  You could have one account for your employer to contribute to thru payroll, and transfer out to a Fidelity HSA for investing.

A couple could each have their own HSA, and split the contributions between them as they see fit.  After age 55, catch up contributions can only go into the individual's HSA, so if we wanted to take advantage of the extra $1k each in contribution space, I'd have to open an HSA in my name to contribute my $1k; I can't put it in DH's existing HSA, though he can lump his regular and catch up contributions together.  In our case, all insurance is thru DH's employer.  I believe the medical expense reimbursements could come from any of these (hypothetical) accounts for either of us, just not for our adult independent children's expenses.


They made the rules convoluted, probably not on purpose, but because the different moving parts intersect badly and get changed frequently by congress.  The rule seems to be best stated as: dependents can't open their own HSA, period. 

You're right, I shouldn't have said "you get one HSA per person".  Especially since I have 2.  I meant you get one "family entity" per person to be covered by (or "make contributions to" if you prefer).  You're covered under "this family" or "your own family".  

So if your adult child is covered by your HDHP, they can have an HSA which can pay their medical expenses.  If they are your dependent then "their HSA" they "have" is the parental HSA which covers them.  If they are independent then they have an HSA with their own name on it.  

Maybe I should have said "HSA bucket" rather than "account"?  I don't have great, simple wording to convey it.  

[hoops902]

I'd be a little interested (I say a little because I'm not interested enough to look it up and figure it out) whether any HSA contribution can be made where an adult child has their own HDHP insurance (not under a parent), but who is still a dependent.  Specifically when the parents do NOT have an HDHP so do not themselves qualify for an HSA.

I think the answer is "no HSA contribution can happen that year" based on the rules.  The parents don't qualify to contribute since they have no HDHP, and the child cannot contribute since they are a dependent.  I like convoluted topics like this  lol.