Health Savings Accounts (HSA) in an Oregon Divorce
What to Know About a Health Savings Account (HSA) in an Oregon Divorce: The Short Version
A Health Savings Account (HSA) is a tax-advantaged savings account that allows you to set aside money to pay for qualified medical expenses.
Unlike an FSA or a DCAP, HSA funds can be transferred from one spouse to the other without cashing them out. The two most common ways to handle an HSA in a divorce in Oregon are:
- A set percentage or dollar amount of the marital portion of the HSA balance is transferred (via language in the Marital Settlement Agreement) from the account holder's HSA to the HSA of the other spouse (also known as the Alternate Payee, or AP). For this option to be available, the receiving spouse must already have an HSA or be eligible to open one.
- The account holder retains the entire marital HSA balance. The other spouse is compensated for her or his share of the value using a cash payment or by receiving other marital assets (e.g., more cash, more retirement funds, etc.) to equalize the division.
Facts About an HSA in a Divorce
- HSA funds are treated like IRA funds for tax purposes and in divorce processes.
- The raw valuation of a Health Savings Account is simply the account balance. If it is transferred directly (as HSA funds), there is no tax adjustment. If the HSA funds are equalized by another asset for the other party, the fact that the HSA funds are pre-tax funds must be considered when assessing what asset is a fair tradeoff.
- The transfer of HSA funds is usually a simple and quick process.
How Mediator Matthew House Will Help You with Your HSA in Divorce Mediation
Matthew will help you navigate the process and understand the laws, regulations, and norms that apply to the post-divorce ownership and use of a Health Savings Account.
Next Steps
Please schedule a FREE consultation as soon as you are ready to begin mediation.