The Basic Requirements for an HSA

You can open a Health Savings Account if you are enrolled in a high-deductible health plan (HDHP) — a health insurance plan with a deductible of at least $1,600 for individual coverage or $3,200 for family coverage in 2024. The deductible amount changes each year, so check your plan documents or call your insurance company to confirm your plan qualifies.

Beyond having the right insurance, you must also be under 65 years old, a U.S. citizen or resident alien, and not claimed as a dependent on someone else's tax return. You cannot have other health coverage at the same time, with limited exceptions for specific plans like dental-only or vision-only insurance.

If you meet these conditions, you are not automatically enrolled — you have to open the account yourself through a bank, credit union, or brokerage firm that offers HSAs. Your employer may offer one through payroll, which is often the simplest route, but you can also open one independently.

Key Takeaways

  • You must be enrolled in 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 be over 65, claimed as a dependent, or covered by other health insurance at the same time, except for dental or vision plans.
  • Having an HDHP does not automatically open an HSA — you must choose to open one through a bank, credit union, employer, or brokerage.
  • If your employer offers an HSA through payroll, that is usually the easiest way to start, but you can open one on your own if you prefer.

How to Check If Your Insurance Plan Qualifies

The first step is confirming that your current health plan is actually a high-deductible plan. Many people assume their plan qualifies without checking, and some plans that look similar do not meet the IRS requirements.

Look at your insurance card or the plan documents your employer or insurance company sent you. Search for the word "deductible" and the dollar amount next to it. If your deductible is $1,600 or higher for individual coverage, or $3,200 or higher for family coverage, your plan likely qualifies. You can also call your insurance company directly and ask: "Is my plan HSA-may be able to access?" They will give you a yes or no answer in seconds.

If you buy insurance through the marketplace or on your own, check the plan details before you enroll. Some plans are labeled as high-deductible plans but do not meet the IRS definition. The marketplace website usually shows whether a plan is HSA-compatible in the plan details section.

What Disqualifies You From Opening an HSA

Even if you have an HDHP, certain situations prevent you from opening an HSA. If you are claimed as a dependent on your parent's or spouse's tax return, you cannot open your own HSA, even if you have your own insurance. This rule applies even if you pay for your own coverage.

If you are enrolled in Medicare, you cannot open a new HSA or contribute to an existing one, though you can keep an HSA you opened before turning 65 and use it to pay for Medicare premiums and out-of-pocket costs. If you have coverage through TRICARE (military health insurance), the Veterans Administration, or certain other government programs alongside your HDHP, you may not be HSA-may be able to access — call your insurance company to confirm.

Having supplemental coverage like dental-only, vision-only, or accident insurance does not disqualify you. Neither does having a Health Flexible Spending Account (FSA) through your employer, though you cannot contribute to both in the same year.

Opening an HSA Through Your Employer

If your employer offers an HSA, this is usually the fastest and cheapest way to open one. Your employer will provide enrollment information during open enrollment or when you first become may be able to access. You typically enroll through your benefits portal or by completing a paper form.

When you enroll through payroll, your contributions come directly from your paycheck before taxes are taken out, which saves you money on federal income tax. Your employer may also contribute to your account — many do as part of their benefits package. Money you do not use in a given year stays in the account and rolls over, so there is no "use it or lose it" important date like there is with FSAs.

If your employer does not offer an HSA but your plan qualifies, you can open one independently at a bank, credit union, or brokerage firm. You will need to contribute with after-tax money and claim the deduction on your tax return, which takes more work but gives you the same tax benefits.

Opening an HSA on Your Own

You can open an HSA independently at any financial institution that offers them — banks, credit unions, and investment brokerages all have HSA options. Search online for "HSA accounts" or "HSA providers" to find options in your area or online.

When you open an account, you will need to provide proof that you are enrolled in an HDHP. Your insurance company can provide a letter confirming your plan is HSA-may be able to access, or you can submit a copy of your insurance card and plan documents. The HSA provider will verify your may be able to access before opening the account.

You can contribute up to $4,150 per year for individual coverage or $8,300 for family coverage in 2024 (these amounts change annually). You contribute with your own money and deduct the amount on your tax return when you file. If you open an HSA mid-year, you can still contribute for the full year, but you have until the tax filing important date (usually April 15) to make that contribution.

What Happens If Your Situation Changes

If you leave your job or switch to a different health plan, your HSA stays with you — it does not belong to your employer. You can keep contributing to it as long as you remain enrolled in an HDHP, even if you open the account with a different employer or on your own.

If you switch to a plan that is not high-deductible, you can no longer contribute new money to your HSA, but you can keep the account and use the money already in it to pay for medical expenses. Once you turn 65, you can no longer contribute, but you can withdraw money for any reason without penalty — you will just pay income tax on non-medical withdrawals.

If you become ineligible for any reason — for example, you are claimed as a dependent or you enroll in Medicare — stop contributing when ready. Continuing to contribute after you become ineligible can result in tax penalties.

Frequently Asked Questions

Can I open an HSA if my employer does not offer one?

Yes. You can open an HSA independently at a bank, credit union, or brokerage as long as you are enrolled in an HDHP. You will contribute with your own money and claim the deduction on your tax return. Your employer does not have to be involved.

What if I have a high deductible but my plan is not called a "high-deductible plan"?

The name does not matter — what matters is whether the plan meets the IRS definition. Call your insurance company and ask directly: "Is my plan HSA-may be able to access?" They will tell you based on the actual deductible and out-of-pocket limits, not the plan name.

Can I open an HSA if I am on my parent's 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 you have your own separate insurance. Once you are no longer claimed as a dependent, you become may be able to access.

What if I turn 65 during the year?

You can contribute to your HSA for the months before you turn 65. Once you enroll in Medicare, you can no longer contribute, but you can keep the account and use it to pay for Medicare premiums, copays, and other medical costs without penalty.

Do I lose my HSA money if I change jobs?

No. Your HSA belongs to you, not your employer. If you change jobs, your account stays open and you can keep using it. You can also continue contributing if your new employer's plan is HSA-may be able to access, or open a separate HSA if it is not.