What are the qualifications for a HSA from your bank?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. Qualifying for an HSA through your bank involves meeting certain criteria:

• You must be covered by a High Deductible Health Plan (HDHP).
• You cannot be claimed as a dependent on someone else's tax return.
• You cannot be enrolled in Medicare.

Additional details to consider:

• The minimum deductible for an HDHP for 2021 is $1,400 for self-only coverage and $2,800 for family coverage.
• The maximum annual out-of-pocket expenses (including deductibles, copayments, and coinsurance) for HDHPs in 2021 are $7,000 for self-only coverage and $14,000 for family coverage.
• Contributions to an HSA are tax-deductible and grow tax-free.
• Funds in an HSA can be used for qualified medical expenses at any time without incurring taxes or penalties.

Health Savings Accounts (HSAs) can unlock significant financial benefits, especially for those with a High Deductible Health Plan (HDHP). To qualify for an HSA with your bank, you need to ensure that you meet specific requirements:

• Your health coverage must be through an HDHP, which is designed to equip you to manage higher out-of-pocket costs.
• You must also be independent; that is, you can't be claimed as a dependent on someone else's tax return.
• Additionally, if you're enrolled in Medicare, you won’t be able to establish a new HSA.

It's worth noting that in 2021, the minimum deductible for a self-only HDHP is $1,400, while for family plans, it’s $2,800. You should also keep in mind that the maximum annual out-of-pocket expenses capped for self-only coverage is $7,000, and for families, it's $14,000.

One of the best features of an HSA is that your contributions can reduce your taxable income, and any funds that grow in your account will do so without being taxed, creating an ideal savings strategy for healthcare costs.