HSAs are sooooo much more flexible than traditional health insurance (like your OTIP/RAEO Plan), 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 could that include?
- spouses
- children
- step children
- adopted children
- parents
- in-laws
- grandparents
- cousins
- and more...
The key is that the individual(s) must be financially dependent upon you in order to qualify.
The CRA considers financial dependence to mean that you’re providing support like housing, food and other necessities on a regular basis.
You can have a dependant that has an income, but that income must not be enough to meet their needs.
The financial support can be voluntary, or as part of a legal agreement.
Qualifying notes
For a common-law spouse to qualify as a dependant, you must have cohabitated (lived together) for the last 12 consecutive months.
At times, a separation or other type of agreement may continue to qualify a dependant spouse. If so, ensure you keep documentation on file in case of an audit or review by CRA.
If adding parents, grand-parents, brothers, sisters, uncles, aunts, nephews, or nieces, they must qualify as residents of Canada at any time in the year the expense was incurred.
If qualification changes, be sure to keep your dependants up to date in your online Member Centre.
Determining eligibility for claims
When you add a dependant to your account, the Effective date affects your dependant's eligibility on your benefit plan features. You can read more about effective dates in this article, Effective dates for dependants.