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, that means a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. Your insurance company will tell you whether your plan qualifies — you do not have to calculate this yourself.

You cannot open an HSA if you are covered by any other health insurance at the same time, with narrow exceptions. Medicare, Medicaid, TRICARE, the Veterans Administration, or a spouse's non-HDHP plan all disqualify you. If you are claimed as a dependent on someone else's tax return, you cannot open an HSA either.

The timing matters. You become HSA-may be able to access the month your HDHP coverage starts. If you switch to a non-HDHP plan mid-year, you stop being may be able to access that same month, though you can keep the account and the money in it.

Key Takeaways

  • Your health insurance must be a high-deductible plan with an IRS-approved deductible amount, which your insurer will confirm when you enroll.
  • You cannot have Medicare, Medicaid, TRICARE, VA coverage, or a spouse's non-HDHP plan at the same time you own an HSA.
  • You become may be able to access the month your HDHP starts and lose may be able to access the month you switch to any other type of health plan.
  • You can open an HSA through your employer, a bank, a credit union, or an investment firm — the account belongs to you regardless of where it is held.

Where you can open an HSA account

You have three main routes. If your employer offers an HDHP, they usually offer an HSA through a specific bank or administrator — you enroll during open enrollment or when you first become may be able to access. Your employer may contribute to the account, and they handle payroll deductions if you choose that option.

If you buy your own HDHP through the health insurance marketplace or directly from an insurer, you open an HSA independently. You can choose any bank, credit union, or investment firm that offers HSAs. The account is yours to keep even if you change jobs or health plans later.

Some people have both: an employer HSA and a separate individual one. You can only contribute to one account per year, so if your employer contributes, you cannot also contribute to an individual account in the same year. The IRS treats the total contributions as one pool.

Age and citizenship requirements

You must be at least 18 years old. You must be a U.S. citizen or a resident alien with a valid tax identification number. Non-citizens without a tax ID cannot open an HSA, though they may be able to enroll in an HDHP itself.

There is no upper age limit for opening an HSA. Once you turn 65, you become may be able to access for Medicare, which disqualifies you from making new HSA contributions — but you can still withdraw money from an existing account for any reason without the usual penalty.

What happens if you lose HSA may be able to access mid-year

If you switch to a non-HDHP plan, lose your health insurance, or become covered by Medicare or Medicaid, you stop being able to contribute to your HSA that month. The money already in the account stays there and you can still withdraw it for may have access to medical expenses.

If you withdraw money for non-medical reasons after you lose may be able to access, you will owe income tax on the withdrawal plus a 20% penalty. This is different from the rules while you are HSA-may be able to access, when non-medical withdrawals only trigger income tax, not the penalty.

Some people use a strategy called the "COBRA continuation" to stay on their employer's HDHP for up to 18 months after leaving a job, which keeps them HSA-may be able to access during that time. This is not automatic — you have to elect COBRA within 60 days of losing coverage.

Self-employed and business owner rules

If you are self-employed or own a business, you can open an HSA as long as you are enrolled in an HDHP. You cannot deduct HSA contributions on your business tax return — instead, you deduct them on your personal return, either as an above-the-line deduction or as part of your self-employed health insurance deduction.

If you have employees, you can contribute to your own HSA even if you do not offer one to them. However, if you do offer an HSA to employees, you must follow non-discrimination rules: you cannot contribute more to your own account than you contribute to theirs on a percentage basis.

Spousal HSA accounts

Married couples can each open their own HSA if both are enrolled in separate HDHPs. If you are both on a family HDHP together, only one of you can own the HSA account, though both of you can withdraw from it for your own medical expenses.

If one spouse has an HDHP and the other has a different type of health plan, only the spouse with the HDHP can open an HSA. The other spouse's coverage disqualifies them from having their own account.

Frequently Asked Questions

Can I open an HSA if I have a health savings account through my spouse's employer?

No. If your spouse has an HSA through their employer, you cannot open a separate one. You can both use the same account for your medical expenses. If you want your own account, your spouse would need to close theirs first, which may not be practical.

What if I am not sure whether my health plan is a high-deductible plan?

Call your health insurance company or check your plan documents — they will state the deductible amount. You can also ask whether the plan is HSA-may be able to access. The insurer has a direct interest in telling you correctly because HSA-may be able to access plans have specific rules they must follow.

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

Only if you are not claimed as a dependent on their tax return. If they claim you as a dependent, you cannot open an HSA even if their plan is a high-deductible plan. Once you are no longer a dependent, you become may be able to access if you are enrolled in an HDHP.

Do I lose my HSA money if I switch to a different health plan?

No. The money stays in your account. You stop being able to contribute new money once you leave the HDHP, but you can withdraw existing funds for medical expenses without penalty. If you switch back to an HDHP later, you can resume contributions.

Can I open an HSA if I am self-employed but also work a part-time job with health insurance?

Only if the part-time job's health plan is also a high-deductible plan. If your part-time employer offers any other type of coverage, you are not HSA-may be able to access, even if you are self-employed elsewhere. You would need to decline the part-time coverage and enroll in an HDHP on your own.