You need an HSA-may be able to access health plan first, then choose a bank or financial institution to hold the account

Opening a Health Savings Account (HSA) is a two-step process: your employer or health plan must offer an HSA-may be able to access plan, and then you pick a financial institution to actually hold the money. You cannot open an HSA on your own—it requires enrollment in a High Deductible Health Plan (HDHP) that meets IRS rules. Once you are enrolled in that plan, you can open an HSA at a bank, credit union, or investment firm that offers them. The whole process usually takes a few days to a week.

The timing matters: you can only open an HSA during the same month you enroll in an HDHP, or during the IRS open enrollment period (usually November through December). If you miss that window, you will have to wait until the next enrollment period unless you have a may have access to life event like a job change or loss of coverage.

Key Takeaways

  • Your employer or health plan must offer an HSA-may be able to access High Deductible Health Plan before you can open an HSA account.
  • You choose the financial institution that holds your HSA separately from your health plan—they are not the same thing.
  • You can only open an HSA during the month you enroll in an HDHP or during the annual open enrollment period.
  • Most banks and investment firms charge no monthly fee for HSAs, though some charge a small fee if your balance falls below a minimum amount.
  • You will need your Social Security number, proof of HDHP enrollment, and basic identification to open an account.

Confirm your employer offers an HSA-may be able to access plan

Start by checking whether your employer's health plan qualifies as an HDHP. If you work for a company with a benefits department, contact them directly and ask: "Do you offer an HSA-may be able to access plan?" They will tell you yes or no. If your employer does not offer one, you cannot open an HSA through them.

If you are self-employed or buy insurance on your own, check your plan documents or contact your insurance company. The plan must have a deductible of at least $1,550 for individual coverage or $3,100 for family coverage in 2024 (these amounts change yearly). Your plan documents will state whether it qualifies as HSA-may be able to access; if you are unsure, call the insurance company's customer service line and ask directly.

You must enroll in the HDHP before or at the same time you open the HSA. If you already have an HDHP, you can open an HSA anytime during that plan year, but if you are switching to an HDHP, you must open the HSA in the same month you enroll in the plan.

Choose a financial institution to hold your account

Once you know you have access to an HDHP, research banks, credit unions, and investment firms that offer HSAs. Common providers include major banks like Chase and Bank of America, online banks like Lively and HealthEquity, and investment firms like Fidelity and Vanguard. Each charges different fees and offers different investment options, so compare a few before deciding.

Look for three things: whether they charge a monthly maintenance fee (many do not), what the minimum balance requirement is (if any), and whether they let you invest the money or only keep it in a savings account. If you plan to use the HSA mainly for current medical expenses, a savings account is fine. If you want to save for retirement and invest the money, choose a provider that offers investment options like mutual funds or index funds.

You do not have to use the HSA provider your employer recommends. Your employer may offer a default provider, but you can choose any HSA-may have access to institution. Some employers will contribute money to your HSA regardless of which provider you pick, while others only contribute if you use their chosen provider—ask your benefits department which applies to you.

Gather the documents you will need

Before you start the application, have these items ready: your Social Security number, a government-issued ID (driver's license or passport), proof that you are enrolled in an HDHP, and your employer's name and address if applicable. The proof of HDHP enrollment can be a benefits letter from your employer, a screenshot of your insurance plan details, or a confirmation email from your insurance company.

If you are opening the account online, you will enter this information into the application form. If you are opening it in person at a bank branch, bring the physical documents. Most institutions let you open an HSA entirely online, which takes about 10 to 15 minutes.

Complete the application and fund your account

Go to the financial institution's website or visit a branch and select "Open an HSA" or "New HSA Account." Fill in your personal information, Social Security number, and HDHP enrollment details. The institution will verify your HDHP status—some do this automatically by checking with your insurance company, while others ask you to upload a copy of your plan documents.

Once your account is approved (usually within a few days), you can fund it. You can set up automatic transfers from your bank account, make a one-time deposit, or arrange for your employer to deposit money directly into the HSA. If your employer contributes to your HSA, they will send the money to your account automatically once it is open.

After funding, you will receive a debit card or checkbook (depending on the provider) that you can use to pay for medical expenses directly. You can also reimburse yourself from other money you have already spent on medical care, or simply let the money sit and grow for future medical expenses.

Understand the timing and enrollment windows

You can only open an HSA during specific windows. If you are enrolling in an HDHP through your employer, you must open the HSA in the same month you enroll in the plan. If you are buying an HDHP on your own through the health insurance marketplace, you can open an HSA anytime during that plan year, but most people do it in the same month they enroll.

The annual open enrollment period runs from November through December (dates vary slightly by year). If you miss the enrollment window and do not have a may have access to life event, you will have to wait until the next open enrollment period to switch to an HDHP and open an HSA. may have access to life events include losing your job, getting married, having a child, or losing other health coverage.

Know what happens after you open the account

Once your HSA is open, you can use it immediately to pay for may have access to medical expenses. These include doctor visits, prescriptions, dental work, vision care, and medical equipment. You cannot use HSA money for insurance premiums (with a few exceptions), cosmetic procedures, or over-the-counter medications unless they are prescribed by a doctor.

Keep receipts for any medical expenses you pay with HSA money. The IRS can audit your account and ask for proof that the money was spent on may have access to expenses. If you use HSA money for non-may have access to expenses before age 65, you owe income tax on that amount plus a 20 percent penalty. After age 65, you can withdraw money for any reason without the penalty, though you still owe income tax on non-medical withdrawals.

Your HSA belongs to you, not your employer. If you leave your job, the account stays open and the money stays yours. You can keep using it, continue contributing to it if you are self-employed, or leave it untouched and let it grow for retirement.

Frequently Asked Questions

Can I open an HSA if I am on Medicare?

No. Once you enroll in Medicare, you are no longer may be able to access to contribute to an HSA. However, if you already have an HSA before enrolling in Medicare, you can keep the account and withdraw money from it for any reason after age 65 without the 20 percent penalty (though non-medical withdrawals are still taxed as income).

What if my employer does not offer an HSA-may be able to access plan?

You can buy an HSA-may be able to access plan on your own through the health insurance marketplace during open enrollment. Once you enroll in that plan, you can open an HSA at any financial institution. You will not get employer contributions, but you can contribute your own money up to the annual limit set by the IRS.

Do I have to use the HSA provider my employer recommends?

No. You can choose any HSA-may have access to financial institution. However, some employers only make contributions to their recommended provider, so check with your benefits department first. If your employer contributes regardless of which provider you choose, you are free to shop around.

How long does it take to open an HSA?

Most online applications take 10 to 15 minutes to complete. Account approval usually takes a few business days. Once approved, you can fund and use the account immediately. In-person applications at a bank branch may take longer depending on how busy the branch is.

What if I enroll in an HDHP mid-year?

You can open an HSA in the same month you enroll in the HDHP, even if it is not during the annual open enrollment period. Your contribution limit for that year will be reduced based on how many months are left in the plan year, so ask your HSA provider or employer what your limit is.