Yes, health savings accounts are still available and you can open one today

Health savings accounts (HSAs) have not been discontinued or restricted. You can open an HSA right now if you have a high-deductible health plan (HDHP) through your employer, the marketplace, or a private insurer. The rules that govern them have not changed significantly in recent years, and the tax advantages remain the same: money you put in is not taxed, growth is not taxed, and withdrawals for may have access to medical expenses are not taxed.

The confusion often comes from news about HSA contribution limits changing year to year—which is normal and happens annually based on inflation. Those changes do not mean HSAs are going away; they mean the dollar amounts shift. For 2024, the contribution limit for individual coverage is $4,150 and for family coverage is $8,300, though these figures change each January.

The real barrier for most people is not availability but may be able to access: you must be enrolled in an HDHP to open or contribute to an HSA. If your current health plan does not may have access to, you cannot use an HSA until you switch to one that does.

Key Takeaways

  • You can open an HSA through your employer's plan, through the marketplace during open enrollment, or through a private HSA provider if you have an HDHP.
  • The only requirement is that your health insurance plan meets the HDHP definition: a deductible of at least $1,600 for individual coverage or $3,200 for family coverage in 2024.
  • Contribution limits change each year based on inflation, so check the current year's limit before you deposit money.
  • Once you open an HSA, you own it and can keep it even if you change jobs or health plans, as long as you do not contribute while you are not enrolled in an HDHP.

Where to open an HSA

If your employer offers an HDHP, they usually offer an HSA through the same benefits administrator. You enroll in both at the same time during open enrollment or when you first become may be able to access. Your employer may also make contributions on your behalf, which counts toward your annual limit but does not reduce your take-home pay.

If you buy insurance through the marketplace (Healthcare.gov or your state's exchange), you can choose an HDHP plan. Once you enroll, you can open an HSA through a bank, credit union, or investment firm. Common providers include Fidelity, Lively, HealthEquity, and Optum Bank, though many others exist. You do not have to use the provider your insurer recommends—you can shop around for lower fees or better investment options.

If you have Medicare, you cannot contribute to an HSA while you are enrolled in Medicare, even if you also have an HDHP. Once you enroll in Medicare Part A or Part B, your HSA contribution window closes. You can still withdraw money from an existing HSA for may have access to expenses, but you cannot add new money.

What makes a health plan HDHP-may be able to access

Your plan must meet specific deductible and out-of-pocket limits set by the IRS each year. For 2024, an individual plan needs a deductible of at least $1,600 and maximum out-of-pocket costs of $3,300. A family plan needs a deductible of at least $3,200 and maximum out-of-pocket costs of $6,550. These numbers change annually.

Not all high-deductible plans are HSA-may be able to access. Some plans have features—like copays for primary care visits or preventive services—that disqualify them. When you look at a plan on the marketplace or through your employer, the plan details will state whether it is HSA-may be able to access. If it does not say so explicitly, contact the insurer or your benefits administrator to confirm.

If you are self-employed or have no group health plan, you can buy an HDHP directly from an insurer and open an HSA with any provider. You are responsible for all contributions and must track them yourself for tax purposes.

How much you can contribute and when

Contribution limits are set by the IRS and announced each October for the following year. For 2024, you can contribute up to $4,150 if you have individual coverage or $8,300 if you have family coverage. If you are 55 or older, you can add an extra $1,000 per year (called a catch-up contribution). These limits apply to all your HSAs combined—if you have two HSAs, your total contributions across both cannot exceed the annual limit.

You can contribute at any time during the year, but contributions for a given tax year must be made by April 15 of the following year (the tax filing deadline). If you enroll in an HDHP partway through the year, you can still contribute a full year's amount if you meet the "testing period" rule: you must remain enrolled in an HDHP through December 31 of that year. If you drop the HDHP before year-end, you may have to repay contributions.

If your employer contributes to your HSA, that money counts toward your limit. If you contribute $2,000 and your employer contributes $1,500, your total for the year is $3,500, leaving you room for only $650 more (assuming individual coverage in 2024).

What you can use HSA money for

You can withdraw money from your HSA tax-free to pay for may have access to medical expenses. These include deductibles, copays, coinsurance, prescription drugs, dental work, vision care, mental health treatment, and many other services. The IRS publishes a full list, but the general rule is: if it is a medical expense your health insurance would normally cover, your HSA can pay for it.

You can also use HSA money to pay for expenses your insurance does not cover, like acupuncture, chiropractic care, or hearing aids—as long as they are legitimate medical expenses. Over-the-counter medications are covered only if you have a prescription. Cosmetic procedures, gym memberships, and vitamins are not covered.

If you withdraw money for a non-may have access to expense before age 65, you owe income tax on the withdrawal plus a 20 percent penalty. After age 65, the penalty goes away, but you still owe income tax on non-may have access to withdrawals. At 65, you can withdraw money for any reason without the penalty, though you still pay tax on non-may have access to amounts.

How to keep your HSA after you change jobs

Your HSA is yours to keep. When you leave a job, the money stays in your account. You do not have to move it, close it, or do anything immediately. If your new employer offers an HSA, you can keep your old one open and open a new one, or you can roll your old HSA into the new one (called a trustee-to-trustee transfer). You can also leave it where it is and continue to use it for may have access to expenses.

The only restriction is that you cannot contribute to an HSA while you are not enrolled in an HDHP. If you take a job with a non-HDHP plan, you stop contributing but you can still withdraw money from your existing HSA for may have access to expenses. Once you enroll in an HDHP again, you can resume contributions.

Some HSA providers charge monthly maintenance fees or investment fees. If your old HSA has high fees and your new employer's HSA has lower fees, a rollover makes sense. If fees are similar, there is no financial reason to move the money.

Common reasons people think HSAs are no longer available

HSA rules change every year, and news coverage of those changes sometimes sounds like HSAs are being eliminated. In reality, the IRS adjusts contribution limits and deductible thresholds annually for inflation. These adjustments are routine and do not affect the availability of HSAs.

Another source of confusion is that some employers have stopped offering HDHPs in favor of other plan types. If your employer does not offer an HDHP, you cannot open an HSA through them—but you can still open one if you buy an HDHP on the marketplace. The availability of HSAs has not changed; the availability of HDHP plans through specific employers has.

Finally, some people believe HSAs are being phased out because they hear about proposals in Congress to change HSA rules. Proposals are not law. As of now, HSAs remain fully available and unchanged from how they have worked for the past decade.

Frequently Asked Questions

Can I open an HSA if I am on Medicare?

No. Once you enroll in Medicare Part A or Part B, you cannot contribute to an HSA. You can still withdraw money from an existing HSA for may have access to medical expenses, but you cannot add new money. If you are approaching Medicare age and want to maximize your HSA, you can make catch-up contributions before you enroll.

What happens to my HSA if I lose my HDHP coverage?

Your HSA stays open and the money remains yours. You cannot contribute new money while you are not enrolled in an HDHP, but you can withdraw money for may have access to medical expenses anytime. Once you enroll in an HDHP again, you can resume contributions.

Can I use my HSA to pay for my spouse's medical expenses?

Yes, as long as your spouse is a dependent on your tax return. You can use HSA money to pay for medical expenses for your spouse, children, and any other tax dependents, even if they are not covered by your HDHP.

Do I have to use my HSA money by the end of the year?

No. HSA money rolls over year to year with no limit. Unlike a flexible spending account (FSA), there is no "use it or lose it" rule. Money you do not spend stays in your account and earns interest or investment returns.

Can I invest my HSA money?

Yes, most HSA providers allow you to invest contributions in mutual funds, stocks, or other securities. Some providers require you to keep a minimum cash balance (often $1,000 to $2,500) before you can invest the rest. Check your provider's investment options and fees before you open an account.