Who is Eligible for a Health Savings Account (HSA)?

Health Savings Accounts (HSAs) are a valuable tool for saving and paying for healthcare expenses, but not everyone is eligible to open one. To be eligible for an HSA, an individual must meet certain criteria outlined by the IRS.

Eligibility for an HSA includes:

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

If you meet these criteria, you can open and contribute to an HSA to save for qualified medical expenses tax-free. Contributions to an HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses.

Additional details about HSA eligibility:

• Individuals can contribute up to a certain limit each year, determined by the IRS
• Employers can also contribute to their employees' HSAs
• HSAs are portable, meaning you can keep your account even if you change jobs or health plans

Health Savings Accounts (HSAs) can be an incredible resource when it comes to managing your healthcare costs, but it’s essential to ensure you’re eligible before diving in. To qualify for an HSA, the IRS outlines some specific criteria that must be met.

Key eligibility requirements for opening an HSA include:

• Being covered under a High Deductible Health Plan (HDHP)
• Not being enrolled in any other health insurance plans that do not qualify as an HDHP
• Not currently receiving Medicare benefits
• Not being claimed as a dependent on another person’s tax return

By meeting these requirements, you can start saving for qualified medical expenses on a tax-advantaged basis. Remember, contributions remain tax-deductible, and funds can grow tax-free while being ready for tax-free withdrawals when the time comes to pay for healthcare services.

It’s also worth noting:

• Each year, the IRS sets a contribution limit for HSAs that you can take advantage of
• Employers often enhance HSA benefits by contributing to their employees’ accounts
• HSAs are portable, allowing you to keep your account even if your job situation changes