Who Is Disqualified from HSA Account?

Health Savings Accounts (HSAs) offer individuals a tax-advantaged way to save for medical expenses. However, not everyone is eligible to open or contribute to an HSA. Knowing who is disqualified from having an HSA is crucial to avoid facing penalties or tax consequences.

Individuals who are disqualified from having an HSA include:

• Individuals enrolled in Medicare.
• Individuals claimed as a dependent on someone else's tax return.
• Individuals who are covered by a non-qualifying high deductible health plan (HDHP).
• Individuals who have other health coverage that is not an HDHP.
• Individuals enrolled in TRICARE.
• Individuals enrolled in VA benefits that cover medical services.

Health Savings Accounts (HSAs) provide a fantastic opportunity for individuals to save for healthcare expenses while enjoying significant tax benefits. However, it’s important to understand the eligibility requirements to ensure you're not disqualified. Individuals who may find themselves disqualified include:

• Those who are enrolled in Medicare, as this is considered a health coverage that restricts HSA eligibility.
• Anyone who is claimed as a dependent on someone else's tax return, limiting their ability to contribute to an HSA.
• Individuals covered by a non-qualifying high deductible health plan (HDHP) may also face disqualification.
• Those who have additional health insurance that does not meet HDHP standards are likewise not eligible to contribute.
• Individuals enrolled in TRICARE should note that this coverage does not qualify for HSA contributions.
• People using VA benefits that cover medical services are also disqualified from establishing an HSA.