How to Tell if Your Health Plan is HSA Eligible?

Health Savings Accounts (HSAs) are excellent tools for managing healthcare costs while saving on taxes. However, not all health plans are HSA eligible. So, how can you determine if your health plan qualifies for an HSA?

Here are some key points to help you identify if your health plan is HSA eligible:

• Check if your health plan is a High Deductible Health Plan (HDHP). To be HSA eligible, your plan must meet specific deductible and out-of-pocket maximum limits set by the IRS.
• Verify your plan's deductible amounts. For 2021, an HDHP must have a minimum deductible of $1,400 for individual coverage and $2,800 for family coverage.
• Confirm the out-of-pocket maximum. The out-of-pocket maximum for 2021 is limited to $7,000 for individuals and $14,000 for families.
• Check if your plan covers only preventive care before meeting the deductible. HDHPs typically offer coverage for preventive services without requiring you to meet the deductible.
• Ensure your plan is not listed as having disqualifying coverage. Some health plans, such as ones with flexible spending account (FSA) options, may make you ineligible for an HSA.
• Review the plan details provided by your employer or insurance provider. They should specify if the plan is HSA eligible.

By considering these factors, you can determine if your health plan is HSA eligible and take advantage of the benefits offered by an HSA.

Determining if your health plan is HSA eligible is crucial for taking advantage of the tax benefits that come with Health Savings Accounts (HSAs). Start by confirming if your plan is classified as a High Deductible Health Plan (HDHP) by checking its deductible and out-of-pocket maximum limits as defined by the IRS.