When children are no longer your dependents you can’t use your HSA to pay their medical bills without getting taxed. Also, family members or any other person can make contributions, not just you and your employer.

This may have implications for your children when they are starting out on their own. If they use a HDHP either in school or at the first job, you or a grandparent can contribute to an HSA they open. You won’t get any direct benefits. However, your child can opt for a HDHP that is more affordable, not worry about a large deductible in an emergency, and get on the path to saving money on HDHPs and investing it through a HSA to build a substantial portfolio for funding future medical care over their lifetime. It is important to start early so contributions have as long as possible to grow.

If your child’s employer offers either a limited-purpose or post-deductible FSA, they can use that for any medical expenses while you fund their HSA. If the employer doesn’t offer an FSA, but has a cafeteria plan, by funding the HSA you may free up funds for a different benefit. Like retirement plans that have catch up provisions at age 50, HSAs have catch up provisions at age 55. Currently it’s $1,000 (the same as an IRA) and continues until age 65 or when you start Medicare.