You need a high-deductible health plan to open an HSA

An HSA is only available to people enrolled in a high-deductible health plan (HDHP). Your health insurance must meet specific deductible and out-of-pocket limits set by the IRS each year. For 2024, an HDHP for individual coverage requires a minimum deductible of $1,600 and a maximum out-of-pocket limit of $4,000. For family coverage, the minimum deductible is $3,200 and the maximum out-of-pocket limit is $8,000. These numbers change annually.

Your insurance company will tell you whether your plan qualifies as an HDHP when you enroll. If you are unsure, check your plan documents or call the number on your insurance card and ask directly: "Is this plan HSA-may be able to access?" The plan must be the only health coverage you have — you cannot have a regular PPO or HMO alongside it.

You also cannot be covered by Medicare, enrolled in a health plan through a spouse's job that is not an HDHP, or claimed as a dependent on someone else's tax return. If any of these apply to you, you are not may be able to access to open an HSA, even if you have an HDHP.

Key Takeaways

  • Your health insurance must be a high-deductible health plan with a deductible of at least $1,600 (individual) or $3,200 (family) in 2024 to open an HSA.
  • You cannot have any other health coverage at the same time, including Medicare or a spouse's non-HDHP plan.
  • You must not be claimed as a dependent on someone else's tax return to open an HSA in your own name.
  • Once you confirm your plan is HSA-may be able to access, you can open an account through a bank, credit union, or investment firm — your insurance company does not open it for you.
  • You can contribute only during the months you are enrolled in an HDHP, and contributions stop the month you leave the plan or turn 65.

How to verify your plan is HSA-may be able to access

Start by reviewing your insurance documents. Your Summary of Benefits and Coverage (SBC) or plan summary will list your deductible and out-of-pocket maximum. Compare these numbers to the IRS limits for the current year. If your deductible meets the minimum and your out-of-pocket maximum does not exceed the cap, your plan likely qualifies.

Call your insurance company if the documents are unclear. Have your policy number ready and ask: "Does my plan meet the IRS requirements for an HSA-may be able to access high-deductible health plan?" They will give you a yes or no answer. Some insurers label their plans as HSA-may be able to access in their marketing materials, but this is not a may provide — always confirm the actual numbers.

If you are shopping for insurance and want an HDHP, look for plans specifically labeled as HSA-compatible or HSA-may be able to access. These are designed to meet the IRS thresholds. On Healthcare.gov or your state marketplace, you can filter by plan type.

Who cannot open an HSA

You are ineligible if you are enrolled in Medicare Part A or Part B, even if you also have an HDHP. Once you turn 65 and enroll in Medicare, your HSA may be able to access ends. You can continue to withdraw money from an existing HSA for any reason, but you cannot make new contributions.

You cannot open an HSA if you are claimed as a dependent on someone else's tax return. This applies even if you have your own income and an HDHP. Once you are no longer a dependent — typically when you file your own return — you become may be able to access.

If your spouse has health coverage through their job and that plan is not an HDHP, you cannot open an HSA. Family coverage under an HDHP works, but mixing an HDHP with a non-HDHP plan disqualifies you. This rule applies even if you are not actually using the spouse's coverage.

Veterans covered by TRICARE or VA health benefits cannot open an HSA. Active-duty military personnel and their families covered by TRICARE are ineligible. If you are a veteran using only VA benefits, you are also ineligible.

Opening an account once you meet the requirements

Your health insurance company does not open an HSA for you. You must open it yourself through a separate financial institution. Banks, credit unions, and investment firms all offer HSA accounts. Some employers offer HSA accounts through payroll, which makes contributions easier, but you can open one independently at any time.

When you open an account, you will need to provide proof that you are enrolled in an HDHP. Most institutions ask for your insurance card or a letter from your insurance company stating that your plan is HSA-may be able to access. Have this ready before you apply.

You can open an HSA at any point during the year you are enrolled in an HDHP. There is no enrollment period or deadline, unlike health insurance itself. However, if you want to make contributions for a year that has already started, you have until the tax filing deadline (usually April 15 of the following year) to open the account and contribute retroactively.

Contribution limits and timing

The amount you can contribute to an HSA each year is set by the IRS and varies by coverage type. For 2024, the limit is $4,150 for individual coverage and $8,300 for family coverage. These limits increase slightly each year. You can contribute only during months when you are enrolled in an HDHP.

If you enroll in an HDHP partway through the year, you can contribute a prorated amount for that year. If you leave an HDHP or turn 65, you can no longer contribute for that year, even if you have money left in your account to spend.

Contributions can come from you, your employer, or both. If your employer offers an HSA through payroll, contributions are deducted before taxes, which lowers your taxable income. If you contribute on your own, you can deduct the contributions on your tax return.

What happens to your HSA if you change plans or jobs

Your HSA belongs to you, not your employer or insurance company. If you leave your job, change health plans, or switch insurance companies, your HSA stays with you. The money in the account is yours to keep and use for medical expenses for the rest of your life.

If you leave an HDHP and enroll in a different type of health plan, you can no longer make contributions to your HSA. However, you can still withdraw money from the account for medical expenses. If you later re-enroll in an HDHP, you can resume contributions.

If you move your HSA to a different bank or investment firm, the process is called a trustee-to-trustee transfer. Your new institution handles most of the paperwork. There are no taxes or penalties for moving your HSA, and you can do this as many times as you want.

Age 65 and HSA may be able to access

When you turn 65, you become may be able to access for Medicare, and your HSA contributions must stop. You can no longer add money to the account, even if you delay enrolling in Medicare or stay enrolled in an HDHP.

After age 65, you can withdraw money from your HSA for any reason without penalty, though non-medical withdrawals are subject to income tax. Before age 65, non-medical withdrawals are taxed and charged a 20% penalty. This makes the HSA more flexible once you reach retirement age.

Frequently Asked Questions

Can I open an HSA if I have not yet enrolled in an HDHP?

No. You must be actively enrolled in an HSA-may be able to access high-deductible health plan to open an account. You cannot open an HSA in advance and then enroll in an HDHP later. However, once you enroll, you can open an account immediately and contribute retroactively for that year if you do so before the tax deadline.

What if my employer offers an HSA but my plan is not an HDHP?

You cannot use it. Your plan must meet the IRS deductible and out-of-pocket limits to be HSA-may be able to access. Ask your benefits administrator to confirm your plan qualifies, or check your plan documents yourself. If it does not may have access to, you are not may be able to access for an HSA through that employer.

Can a married couple both have HSAs?

Yes, if you both have individual coverage under separate HDHP plans. If you have family coverage under a single HDHP, only one HSA can be opened for that plan, and either spouse can own and manage it. You cannot have two HSAs under the same family plan.

What if I turn 65 mid-year?

You can contribute to your HSA only for the months before you turn 65. If you turn 65 in June, you can contribute a prorated amount for January through May. Starting in June, contributions are no longer allowed. You can still withdraw from the account for medical expenses.

Do I lose my HSA if I switch to a non-HDHP plan?

No. Your HSA account and the money in it remain yours. You simply cannot make new contributions while you are enrolled in a non-HDHP plan. If you return to an HDHP later, you can resume contributions. The account itself never closes unless you close it.