Who is Eligible to Open an HSA? - Understanding Health Savings Account Eligibility

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. But who is eligible to open an HSA?

To be eligible to open an HSA, you must meet 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.
• You cannot be covered by another health plan that is not an HDHP.

Additionally, you must meet the following requirements:

• You must not have any other first-dollar medical coverage (except for preventive care and permitted insurance or permitted coverage).
• You must not be enrolled in a general purpose Health Care Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA).

It's important to note that even if you meet the eligibility criteria, there are limits to how much you can contribute to your HSA each year. For 2021, the maximum contribution limits are $3,600 for individuals and $7,200 for families.

Health Savings Accounts (HSAs) are a smart way to build savings for future medical costs, offering you significant tax advantages. But many people wonder: who can actually open one of these accounts?