Can I Contribute to an HSA if You are Covered Under a Consumer-Directed Health Plan?

If you are covered under a consumer-directed health plan, you most likely have the option to contribute to a Health Savings Account (HSA). An HSA is a tax-advantaged savings account that allows you to set aside money for qualified medical expenses.

Here are key points to consider:

• Consumer-directed health plans, such as High Deductible Health Plans (HDHPs), are typically compatible with HSAs.
• To contribute to an HSA, you must be enrolled in an HDHP and not be covered by other health insurance that is not an HDHP.
• Contributions to your HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses.
• For 2021, the maximum contribution limit for individuals is $3,600 and $7,200 for families.
• If you are 55 or older, you can make catch-up contributions of an additional $1,000 per year.

Being covered under a consumer-directed health plan gives you the opportunity to take control of your healthcare expenses and save for the future. Consult with your employer or financial advisor to fully understand the benefits and rules of contributing to an HSA.

If you're considering topping up your Health Savings Account (HSA), being covered under a consumer-directed health plan opens up a world of tax advantages and savings for medical expenses.