Am I eligible for a Health Savings Account?

If you've read some our other articles, like Top 10 ways to use an HSA, you already know that millions of people choose Health Savings Accounts (HSAs) for their powerful tax advantages. In fact, HSAs are among the most effective ways to pay for HSA-qualified expenses. If you are currently enrolled in a qualifying health plan, you are likely eligible for one of these truly awesome accounts.

Whether you're opening a new HSA or want to keep contributing to your existing one, let's look at the eligibility requirements.

Key eligibility criteria for HSAs

To be eligible for an HSA, you must meet the following requirements set by the IRS:

1. You must be enrolled in a High-Deductible Health Plan (HDHP).

A high-deductible health plan (HDHP) is a health insurance plan with a higher annual deductible than typical plans. For 2024, the IRS defines an HDHP as a plan with a minimum deductible of $1,600 for individual coverage or $3,200 for family coverage.

Your HDHP can be obtained through your employer or purchased individually. Many employers offer HDHPs alongside traditional health plans during open enrollment.

Not sure if a high-deductible plan is right for you? Should I choose a high-deductible health plan?

2. You can't be enrolled in any other non-qualified health plan.

If you have other health coverage that is not an HDHP — such as a spouse's traditional health plan or a general-purpose FSA — you generally cannot contribute to an HSA. However, certain types of coverage are allowed, including dental, vision, disability, and long-term care insurance.

A Limited-Purpose FSA (LPFSA) is permitted alongside an HSA because it only covers dental and vision health expenses.

3. You can't be enrolled in Medicare.

Once you enroll in any part of Medicare (Part A, Part B, or Part D), you can no longer contribute to an HSA. However, you can still use your existing HSA funds to pay for qualified medical expenses, including Medicare premiums.

If you are nearing age 65, consider reading our quick guide for members 55 and older.

4. You are at least 18 years old and not claims as a dependent.

You must be 18 years of age or older and not claimed as a dependent on someone else's tax return.

If you meet all four criteria, congratulations — you are eligible to open and contribute to an HSA! Your HSA funds can be used to pay for a wide range of healthcare expenses tax-free.