IRS Requirements for High-Deductible Health Plan for HSA

When it comes to opening a Health Savings Account (HSA), one of the key requirements set by the IRS is having a High-Deductible Health Plan (HDHP). Understanding the specific criteria that the IRS outlines for an HDHP can help individuals make informed decisions about their healthcare and finances.

Key requirements specified by the IRS for an HDHP include:

• The minimum annual deductible amount
• The maximum out-of-pocket expense limit

Meeting these requirements ensures that the health plan qualifies as an HDHP and allows individuals to contribute to an HSA for tax advantages.

To open a Health Savings Account (HSA), it's essential to first have a High-Deductible Health Plan (HDHP). The IRS sets specific guidelines for what constitutes an HDHP, and understanding these can empower you to make better healthcare choices.

Key IRS requirements for an HDHP include:

• A minimum annual deductible that must be met before your insurance kicks in.
• A maximum out-of-pocket expense limit that protects you from excessive healthcare costs.

These requirements are significant because only plans that meet them can have HSAs linked to them, offering you valuable tax advantages.