What Makes a Health Plan HSA Eligible?

When it comes to choosing a health plan that is HSA eligible, there are specific criteria that need to be met. Understanding what makes a health plan eligible for a Health Savings Account (HSA) is important for individuals looking to take advantage of the tax benefits and flexibility that an HSA offers.

Here are some key factors that determine if a health plan is HSA eligible:

• High Deductible Health Plan (HDHP): To be HSA eligible, a health plan must be classified as an HDHP by meeting specific deductible and out-of-pocket maximum limits set by the IRS.
• Deductible and Out-of-Pocket Maximum: For 2021, the minimum deductible for an HDHP is $1,400 for individuals and $2,800 for families. The out-of-pocket maximum cannot exceed $7,000 for individuals and $14,000 for families.
• Not Covered by Other Health Insurance: To qualify for an HSA, you cannot be covered by any other health insurance plan that is not an HDHP, with exceptions for certain types of coverage such as dental, vision, and specific preventative care.
• Cannot be Enrolled in Medicare: Individuals enrolled in Medicare are not eligible to contribute to an HSA, so if you are over 65 and enrolled in Medicare, you cannot open or contribute to an HSA.

When selecting a health plan eligible for a Health Savings Account (HSA), you must consider specific criteria to ensure you benefit from potential tax advantages and the flexibility that HSAs provide.