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

An HSA account is only available to people enrolled in a high-deductible health plan (HDHP). Your health insurance provider determines whether your plan qualifies as an HDHP based on the deductible amount and out-of-pocket limits set by the IRS each year. If your employer offers an HDHP option or you buy one on the individual market, you can open an HSA. If your plan does not meet the HDHP definition, you cannot open an HSA, even if you want to.

The IRS sets minimum deductible amounts annually. For 2024, an HDHP for individual coverage must have a deductible of at least $1,600, and for family coverage at least $3,200. Your plan's out-of-pocket maximum (the most you pay before insurance covers everything) must also stay within IRS limits. Your health insurance company will tell you whether your plan qualifies—look for "HSA-may be able to access" or "HDHP" language in your plan documents or call their customer service line.

Key Takeaways

  • You must be enrolled in an HDHP to open an HSA; plans that do not meet IRS deductible and out-of-pocket limits do not may have access to.
  • You cannot have other health coverage like Medicare, Medicaid, TRICARE, or a spouse's non-HDHP plan and still use an HSA.
  • You must be a U.S. citizen or resident alien with a valid Social Security number or Individual Taxpayer Identification Number (ITIN).
  • You can open an HSA through your employer's plan administrator, a bank, credit union, or insurance company that offers HSA accounts.
  • If you lose HDHP coverage, you stop being able to contribute to your HSA, but you keep the money already in the account.

Coverage conflicts that disqualify you from an HSA

Even if you have an HDHP, certain other types of coverage prevent you from opening or contributing to an HSA. You cannot have an active HSA if you are covered by Medicare, Medicaid, TRICARE (military health coverage), or the Veterans Health Administration. You also cannot contribute if your spouse has a non-HDHP plan and you are covered under it, or if you are claimed as a dependent on someone else's tax return.

The rule is strict: you must have only HDHP coverage (or no coverage at all) to contribute. If your spouse has an HDHP and you have a traditional PPO or HMO through your employer, only your spouse can contribute to an HSA. If you both have HDHPs, you each open separate accounts. Once you turn 65, you become ineligible to contribute new money, though you can still withdraw from an existing HSA for any reason without the usual penalty.

Citizenship and tax identification requirements

You must be a U.S. citizen or resident alien to open an HSA. Resident alien status is determined by the IRS using the substantial presence test or a green card. You will need either a valid Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) to open an account. The financial institution holding your HSA will ask for this during account setup.

If you are a non-resident alien or do not have an SSN or ITIN, you cannot open an HSA. If your immigration status changes during the year and you become ineligible, you stop being able to contribute, but any money already in the account remains yours to use.

How to confirm your HDHP qualifies

Before opening an HSA, verify that your health plan actually meets the HDHP definition. Log into your health insurance company's website or call the customer service number on your insurance card. Ask directly: "Is this plan HSA-may be able to access?" or "Does this plan meet the HDHP requirements?" Your insurer can tell you the exact deductible and out-of-pocket maximum for your plan and confirm it qualifies.

You can also check your Summary of Benefits and Coverage (SBC), a document your insurer must provide. Look for the deductible amount and out-of-pocket maximum, then compare them to the current year's IRS limits. If your plan's deductible is lower than the IRS minimum or your out-of-pocket maximum exceeds the IRS cap, the plan does not may have access to as an HDHP.

Where to open an HSA account

If you have an HDHP through your employer, your company's benefits administrator or payroll department usually offers HSA accounts directly. You can often set one up during open enrollment or when you first enroll in the HDHP. Your employer may even contribute money to your account as part of your benefits package.

If you buy an HDHP on your own through the health insurance marketplace or directly from an insurer, you can open an HSA through a bank, credit union, or financial services company that offers HSA accounts. Common providers include Fidelity, HealthEquity, Lively, and many traditional banks. You will need your health insurance policy number and proof of HDHP coverage when you open the account.

What happens if you lose HDHP coverage

If you switch to a non-HDHP plan, leave your job, or lose coverage, you stop being able to contribute new money to your HSA immediately. However, you keep the money already in the account and can continue to withdraw it for may have access to medical expenses at any time, tax-free. The account does not close; it just stops accepting contributions.

If you regain HDHP coverage later—by switching jobs, enrolling in a new HDHP during open enrollment, or buying one on the marketplace—you can resume contributions. Your old HSA account can stay open and active, or you can open a new one. Many people keep the same account for years, even if they change employers or plans, as long as they maintain HDHP coverage.

Age limits and HSA may be able to access

There is no minimum age to open an HSA if you are covered by an HDHP, but you must meet all other requirements (U.S. citizenship, valid tax ID, no conflicting coverage). At age 65, you become ineligible to make new contributions to an HSA. Once you turn 65, you can still withdraw money from your HSA for any reason without penalty, though non-medical withdrawals are taxed as ordinary income.

If you enroll in Medicare at 65, you automatically lose HSA may be able to access because Medicare coverage disqualifies you. Some people delay Medicare enrollment to keep contributing to an HSA longer, but this is a complex decision that depends on your specific situation and should be discussed with a tax professional or benefits counselor.

Frequently Asked Questions

Can I open an HSA if I have a high-deductible plan through my spouse's employer?

Yes, if your spouse's plan is an HDHP and you are covered under it. You and your spouse can each open separate HSA accounts if you both have individual HDHP coverage, or you can open a family HSA account if you are both covered under the same family HDHP. You cannot contribute to an HSA if your spouse has a non-HDHP plan and you are covered under it.

What if I am self-employed and buy my own health insurance?

You can open an HSA if you buy an HDHP on the individual market or through a professional association. You will need to open the account through a bank, credit union, or HSA provider—not through an employer. You can contribute up to the annual IRS limit and deduct contributions on your tax return.

Can I have an HSA if I also have dental or vision insurance?

Yes. Dental and vision coverage do not disqualify you from an HSA. Only major medical coverage matters—if your major medical plan is an HDHP, you can have an HSA regardless of whether you also have separate dental or vision plans.

What happens to my HSA if I move to a different state?

Your HSA remains active and usable. HSAs are federal accounts, not state-specific, so moving does not affect your may be able to access or your account. You can continue to use the money for may have access to medical expenses anywhere in the country.

Can I open an HSA if I am on my parents' health insurance as a dependent?

No. If you are claimed as a dependent on someone else's tax return, you cannot open an HSA, even if your parents' plan is an HDHP. Once you are no longer claimed as a dependent and you have your own HDHP coverage, you become may be able to access.