Not everyone can open an HSA — you need a specific type of health insurance

To open a Health Savings Account (HSA), you must be enrolled in a High Deductible Health Plan (HDHP). This is the main requirement, and it's a hard one — you cannot have an HSA without this insurance type. If your current plan is a standard PPO, HMO, or any other type of health insurance, you cannot open an HSA, even if you want to save money for medical expenses.

An HDHP is a real insurance plan that covers your medical care, but it has a higher deductible than traditional plans. The deductible is the amount you pay out of pocket before your insurance starts to pay. Because the deductible is higher, the monthly premium (the amount you pay for the insurance itself) is usually lower. The IRS sets the minimum deductible amounts each year, and they change annually.

If you have an HDHP through your employer, you are already may be able to access. If you buy insurance on your own through the health insurance marketplace or a private insurer, you can choose an HDHP plan if one is offered in your area. Not all areas have HDHP options, and not all insurers offer them.

Key Takeaways

  • You must be enrolled in a High Deductible Health Plan to open an HSA; no other type of health insurance qualifies.
  • You cannot be claimed as a dependent on someone else's tax return and also have your own HSA at the same time.
  • You cannot have both an HSA and a Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA) in the same year.
  • If you are on Medicare, you cannot open a new HSA, though you can keep one you already have under certain conditions.
  • You must be a U.S. citizen or resident alien with a valid Social Security number or Individual Taxpayer Identification Number.

The HDHP requirement explained

An HDHP is not a special savings account — it is actual health insurance. It works like any other plan: you go to the doctor, you show your insurance card, and the plan covers some of your costs. The difference is that you pay more out of your own pocket before the insurance kicks in.

The IRS publishes minimum deductible amounts each year. For 2024, an individual HDHP must have a deductible of at least $1,600, and a family plan must have a deductible of at least $3,200. These numbers change yearly. Your plan also cannot have an out-of-pocket maximum (the most you will pay in a year) above a certain limit set by the IRS.

If you are shopping for insurance and want an HSA, look for plans labeled as "HSA-may be able to access" or "HDHP." Not every insurer offers them, and availability depends on where you live and whether you are buying through an employer or the marketplace. If your employer offers an HDHP option, that is usually the easiest route.

Tax filing status and dependent rules

You cannot have an HSA if you are claimed as a dependent on someone else's tax return. This applies even if you are an adult. If your parents claim you as a dependent for tax purposes, you are not allowed to open an HSA, regardless of whether you have an HDHP. This rule exists because HSAs have tax benefits, and the IRS does not allow those benefits to stack when someone else is already claiming you.

If you are married and file taxes jointly, both spouses can have HSAs as long as you both have HDHP coverage. If you file separately, the rules become more complex, and you should check with a tax professional or the IRS before opening an account.

Conflicts with other savings accounts

You cannot have an HSA and a Flexible Spending Account (FSA) at the same time in the same year. An FSA is a different type of account that lets you set aside pre-tax money for medical expenses. Some employers offer both, but you have to choose one. If you have an FSA through your employer, you cannot open an HSA that year.

The same rule applies to a Health Reimbursement Arrangement (HRA), another employer-sponsored account for medical expenses. If your employer offers an HRA, you may not be able to have an HSA. Some employers offer a special type of HRA that is compatible with HSAs, but this is less common. Ask your employer's benefits office whether your HRA is HSA-compatible before assuming you cannot open an account.

Medicare and age restrictions

Once you enroll in Medicare, you cannot open a new HSA. Medicare is the federal health insurance program for people 65 and older and some younger people with disabilities. If you turn 65 and enroll in Medicare, your HSA may be able to access ends on the first day of the month you turn 65.

If you already have an HSA before you turn 65, you can keep it and continue to use it to pay for medical expenses, including Medicare premiums and out-of-pocket costs. You just cannot add new money to it once you are on Medicare. This makes HSAs useful for people planning ahead for retirement medical costs.

Citizenship and identification requirements

You must be a U.S. citizen or a resident alien to open an HSA. A resident alien is someone who is not a U.S. citizen but has been granted permanent residency or meets IRS tests for tax residency. You will need a valid Social Security number or an Individual Taxpayer Identification Number (ITIN) to open an account.

If you are in the U.S. on a temporary visa (such as an H-1B or student visa), you may not meet the resident alien test and therefore may not be able to open an HSA. The rules vary depending on your visa type and how long you have been in the country. If you are unsure about your status, contact the bank or financial institution where you want to open the HSA, or consult a tax professional.

What happens if your situation changes

If you lose your HDHP coverage — for example, because you switch jobs and your new employer offers only a traditional health plan — you can no longer contribute to your HSA. However, you can keep the account and the money in it. You can continue to withdraw money from the HSA to pay for medical expenses without penalty, even though you are no longer adding to it.

If you become may be able to access again later (for instance, you change jobs and your new employer offers an HDHP), you can resume contributions. Your HSA account stays with you as long as you keep it open, even if there are gaps when you are not contributing.

Frequently Asked Questions

Can I open an HSA if I have a spouse with a traditional health plan?

Yes. Your spouse's insurance type does not affect your may be able to access. As long as you are enrolled in an HDHP and meet all other requirements, you can open an HSA. Your spouse cannot have an HSA unless they also have an HDHP, but that is a separate decision.

What if my employer offers an HDHP but I do not want to enroll in it?

You cannot open an HSA without an HDHP. If you choose a different health plan through your employer, you will not be able to have an HSA that year. You can change your plan choice during the next open enrollment period if you change your mind.

Can I have an HSA if I am self-employed?

Yes, as long as you purchase an HDHP for yourself. Self-employed people can buy HDHP coverage through the health insurance marketplace or directly from insurers. Once you have the HDHP, you can open an HSA just like anyone else.

Do I lose my HSA if I change jobs?

No. Your HSA belongs to you, not your employer. If you change jobs, your HSA stays with you. You can keep the same account or move the money to a new HSA at a different bank. Your ability to contribute depends on whether your new job offers an HDHP.

Can a teenager open an HSA?

Only if they are not claimed as a dependent on a parent's tax return and they have an HDHP in their own name. Most teenagers are claimed as dependents, which makes them ineligible. Once they are no longer a dependent (usually after age 18 or when they file their own taxes), they can open an HSA if they have an HDHP.