Not everyone can open an HSA — you need a specific type of health insurance first

You can only open a Health Savings Account (HSA) if you are enrolled in a high-deductible health plan (HDHP). That is the hard requirement. Your employer may offer an HDHP, you may buy one on the individual market, or you may may have access to for one through Medicare Advantage — but without that plan type, you cannot open an HSA, period.

The IRS sets the minimum deductible each year. For 2024, an HDHP must have a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. Your plan documents will tell you whether it qualifies. If you are unsure, ask your employer's benefits administrator or your insurance company directly — they can confirm in one call.

You also cannot be claimed as a dependent on someone else's tax return, and you cannot be enrolled in Medicare (with narrow exceptions for certain Medicare Advantage plans). If either of those applies to you, an HSA is not available.

Key Takeaways

  • You must be enrolled in a high-deductible health plan to open an HSA; no HDHP means no HSA, regardless of income or age.
  • Your HDHP's deductible must meet the IRS minimum ($1,600 individual or $3,200 family in 2024) to may have access to.
  • You cannot open an HSA if you are claimed as a dependent, enrolled in traditional Medicare, or covered by certain other insurance types like Tricare or Veterans Affairs.
  • Your employer may offer an HDHP and HSA together, or you can buy an HDHP on the individual market and open an HSA with any bank or financial institution that offers them.
  • Once you lose HDHP coverage, you can no longer contribute to an HSA, though you keep the money already in it.

What disqualifies you from opening an HSA

Beyond the HDHP requirement, the IRS has a short list of things that make you ineligible. If you are enrolled in Medicare Part A or Part B, you cannot contribute to an HSA — even if you also have an HDHP. The exception is Medicare Advantage (Part C), which some people can pair with an HSA, but you need to check with your plan administrator first because not all Medicare Advantage plans may have access to.

If you are covered by Tricare (military health insurance) or Veterans Affairs coverage, you are also barred from HSA contributions. The same applies if you are covered by your spouse's FSA (Flexible Spending Account) — though your spouse can have an HSA if they are on an HDHP.

Being claimed as a dependent on someone else's tax return disqualifies you, even if you are an adult. This matters for college students and adult children on their parents' returns. Once you file your own return, you become may be able to access (assuming you have an HDHP).

How employer HSAs differ from individual HSAs

If your employer offers an HDHP, they usually set up an HSA for you automatically or make it easy to open one through their benefits portal. Your employer may also contribute money to your HSA as part of your compensation — this is common and counts toward your annual contribution limit, but it does not count as taxable income to you.

If you buy an HDHP on your own through the individual market (healthcare.gov, state exchanges, or directly from an insurer), you must open an HSA separately. You can open one with any bank, credit union, or financial institution that offers HSAs — Fidelity, Lively, HealthEquity, and many others do. There is no requirement to use your insurer's HSA provider, though some people do for convenience.

The contribution limits are the same either way: $4,150 for individual coverage or $8,300 for family coverage in 2024 (these amounts change annually). If your employer contributes, that reduces how much you can add yourself in the same year.

Self-employed people and HSA may be able to access

If you are self-employed, you can open an HSA as long as you buy an HDHP for yourself. You purchase the plan on the individual market (through healthcare.gov or a state exchange), confirm it meets the IRS deductible minimum, and then open an HSA with any provider. You are responsible for the full premium, but you can deduct it from your self-employment income on your tax return.

Self-employed people can also contribute to an HSA up to the annual limit, just like employees. If you have employees and offer them an HDHP, they can open HSAs too — you are not required to contribute to theirs, though some small-business owners do as a benefit.

What happens to your HSA if you change jobs or lose coverage

Your HSA belongs to you, not your employer. If you leave your job, you keep the money in your HSA and can take it with you. You can roll it to a new HSA at a different bank or financial institution, or leave it where it is.

If you lose HDHP coverage — because you switched to a different health plan, lost your job, or aged into Medicare — you can no longer contribute to an HSA. But the money already in it stays yours and grows tax-free. You can withdraw it for may have access to medical expenses at any time without penalty. If you withdraw it for non-medical expenses before age 65, you pay income tax plus a 20% penalty on the withdrawal amount. After 65, you can withdraw for any reason without the penalty (though you still pay income tax on non-medical withdrawals).

Checking whether your plan qualifies as an HDHP

Your health plan documents should state whether it is an HDHP. Look for language like "high-deductible health plan" or "HDHP" in the summary of benefits. You can also call your insurance company or your employer's benefits team and ask directly: "Is my plan an IRS-may have access to high-deductible health plan?" They will confirm yes or no.

Do not assume based on the deductible amount alone. Some plans have high deductibles but do not meet other IRS requirements (like limits on out-of-pocket costs). The insurance company or your employer will know whether your specific plan is IRS-may have access to.

If you are shopping for an HDHP on the individual market, the plan will be labeled as such. Healthcare.gov and state exchanges let you filter by plan type, and insurers' websites do too.

Frequently Asked Questions

Can I open an HSA if I have a high-deductible plan but my spouse does not?

Yes. Each person with an HDHP can open their own HSA. Your spouse can open one if they are on an HDHP; if they are on a different plan type, they cannot. Your HSAs are separate accounts with separate contribution limits.

What if I turn 65 and enroll in Medicare?

You can no longer contribute to an HSA once you enroll in Medicare Part A or Part B. The money already in your HSA stays yours and can be used for Medicare premiums, copays, and other may have access to medical expenses tax-free. After 65, you can also withdraw for non-medical reasons without the 20% penalty (though income tax still applies).

Can a college student on their parents' insurance open an HSA?

Only if they are not claimed as a dependent on their parents' tax return. If they file their own return and are enrolled in an HDHP, they can open an HSA. If they are claimed as a dependent, they cannot contribute, even if they have their own HDHP coverage.

Do I have to use my employer's HSA provider, or can I open one elsewhere?

If your employer offers an HSA through a specific provider, you can usually choose to use it or open one with a different bank or financial institution. Check your employer's benefits materials or ask HR. Some employers require you to use their provider if they are making contributions, but many do not.

What if my plan has a high deductible but the insurance company says it is not an HDHP?

Then it does not meet IRS requirements, and you cannot open an HSA. Some plans have high deductibles but exceed the IRS limit on out-of-pocket costs or include other features that disqualify them. The insurance company's information is what matters for HSA purposes.