Understanding HSA Requirements: What You Need to Know

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax advantages. To open an HSA, there are certain requirements that must be met:

• Eligibility: You must be covered by a High Deductible Health Plan (HDHP) to qualify for an HSA. This means your health insurance plan must meet specific deductible and out-of-pocket maximum limits set by the IRS.
• Not enrolled in other health coverage: You cannot be enrolled in Medicare or claimed as a dependent on someone else's tax return if you want to contribute to an HSA.
• Contribution limits: The IRS sets annual limits on how much you can contribute to your HSA each year. For 2021, the contribution limit is $3,600 for individuals and $7,200 for families.
• Qualified medical expenses: HSA funds can be used to pay for a variety of medical expenses, including doctor's visits, prescriptions, and even some over-the-counter items. It's important to keep receipts and records of your expenses for tax purposes.

By meeting these requirements and properly managing your HSA, you can enjoy the benefits of tax-free savings for healthcare expenses both now and in the future.

Health Savings Accounts (HSAs) provide a fantastic opportunity for individuals and families to save money for medical expenses while reaping fantastic tax benefits. To qualify for an HSA, you must be covered by a High Deductible Health Plan (HDHP), which means your health insurance must comply with specific deductible and out-of-pocket maximums established by the IRS.