Who is Eligible to Make HSA Contribution?

Health Savings Accounts (HSAs) are a valuable tool for saving money on healthcare expenses while also reducing taxable income. Understanding who is eligible to make HSA contributions is crucial for maximizing the benefits of this financial account.

To be eligible to make HSA contributions, an individual must meet the following criteria:

• Be covered by a High Deductible Health Plan (HDHP)
• Not be covered by any other health coverage that is not an HDHP
• Not be enrolled in Medicare
• Not be claimed as a dependent on someone else's tax return

It's important to note that even if you meet the eligibility requirements to contribute to an HSA, there are annual contribution limits set by the IRS. For 2021, the contribution limit for individuals is $3,600, and for families, it is $7,200.

Additionally, individuals over the age of 55 can make catch-up contributions of up to $1,000 per year. This allows older individuals to boost their HSA savings as they near retirement.

Health Savings Accounts (HSAs) offer individuals an excellent way to set aside money for healthcare expenses. To contribute to an HSA, you must be enrolled in a High Deductible Health Plan (HDHP), which plays a crucial role in your eligibility.