Understanding What Makes a HDHP HSA Eligible

When considering a Health Savings Account (HSA), it's important to understand what makes a High Deductible Health Plan (HDHP) HSA-eligible. To be eligible for an HSA, an individual must meet certain criteria:

• The individual must be covered by an HDHP
• The individual cannot be covered by another health plan that is not an HDHP
• The individual cannot be enrolled in Medicare
• The individual cannot be claimed as a dependent on someone else's tax return

Additionally, there are specific requirements that a HDHP must meet to be considered HSA-eligible:

• The HDHP must have a minimum deductible amount set by the IRS
• The HDHP must have a maximum out-of-pocket limit set by the IRS

Choosing a HDHP that meets these criteria can provide individuals with the opportunity to contribute to an HSA, which offers tax advantages and flexibility in managing healthcare expenses.

Understanding the criteria for a High Deductible Health Plan (HDHP) to qualify for a Health Savings Account (HSA) is essential for those looking to maximize their healthcare savings. An HSA offers a triple tax advantage: your contributions are tax-deductible, the earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free. To qualify for this beneficial account, you must be covered by an HDHP, which has specific deductible and out-of-pocket maximums set by the IRS.