You can open an HSA if you have a high-deductible health plan and meet a few other requirements

To open a Health Savings Account (HSA), you need three things: a high-deductible health plan (HDHP) as your main insurance, no other health coverage that would disqualify you, and a valid Social Security number. The plan itself must meet IRS rules about how high the deductible is and what your out-of-pocket costs can be. If you have all three, you can open an HSA through a bank, credit union, or investment company — you do not need permission from your employer or insurance company, though some employers offer HSAs as part of their benefits.

The most common barrier is not having an HDHP. If your current plan has a lower deductible, you cannot open an HSA until you switch to a may have access to plan. This usually happens during open enrollment at work, or on the individual market during the annual enrollment period. Some people find they cannot switch because their employer does not offer an HDHP option, or because switching would cost more in premiums than they save in HSA contributions.

Key Takeaways

  • You must be enrolled in a high-deductible health plan to open an HSA; no other type of health insurance qualifies.
  • You cannot have other health coverage at the same time, with narrow exceptions for specific types like dental-only or vision-only plans.
  • You can open an HSA through any bank or investment company, not just through your employer, as long as you meet the plan requirement.
  • If you do not have an HDHP now, you can explore switching during open enrollment or check whether your employer offers one as an option.

What counts as a high-deductible health plan

An HDHP is defined by the IRS, not by your insurance company. For 2024, the deductible must be at least $1,600 for individual coverage or $3,200 for family coverage. The plan's out-of-pocket maximum — the most you pay in a year before insurance covers everything — cannot exceed $4,000 for individual coverage or $8,000 for family coverage. These numbers change each year, so if you are looking at a plan from a previous year, the thresholds were different.

Your insurance company will tell you whether a plan qualifies as an HDHP. Look for that label in the plan documents or on the insurance company's website. If you are shopping on the individual market through your state's health insurance marketplace, you can filter for HDHP plans. If your employer offers health insurance, ask your benefits administrator which plans, if any, are high-deductible plans.

Other coverage that blocks you from opening an HSA

You cannot have any other health insurance at the same time as your HDHP, with a few exceptions. The main exceptions are plans that cover only one type of care: dental-only insurance, vision-only insurance, workers' compensation, and long-term care insurance do not disqualify you. Medicare also does not disqualify you if you are still working and have an HDHP through your job, though the rules are complex if you are over 65.

Spousal coverage is a common situation. If you are married and your spouse has a non-HDHP plan through their job, you cannot use an HSA even if you have an HDHP, because you are covered under their plan. The same applies if you are a dependent on someone else's non-HDHP plan. You would need to be on your own HDHP plan, not covered by anyone else's insurance.

If you are on Medicaid or receive Veterans Affairs health benefits, you cannot open an HSA. These are considered health coverage that disqualifies you. Some people are on both Medicaid and an HDHP during a transition period — for example, if Medicaid coverage ends mid-year — and the rules for that situation are specific. Contact the HSA provider or the IRS if you are unsure whether your coverage combination works.

How to open an HSA once you have an HDHP

Once you are enrolled in an HDHP, you can open an HSA at any bank, credit union, or investment company that offers them. You do not have to use your insurance company's HSA provider, and you do not have to use your employer's plan if they offer one. Some people choose their employer's plan because the employer contributes money to it, but you are free to open your own elsewhere.

To open an account, you will need your Social Security number, proof of your HDHP coverage (your insurance card or a letter from your insurance company), and a valid ID. Some providers ask for proof that you are enrolled in an HDHP before they let you open the account. You can open an HSA online, by phone, or in person, depending on the provider. The process usually takes a few days to a week.

You can contribute money to your HSA as soon as the account is open. If you opened the account partway through the year, you can still contribute for that year, but only up to the amount allowed for the number of months you were enrolled in an HDHP. The IRS calls this a prorated contribution. For example, if you opened an HDHP in July, you can contribute one-twelfth of the annual limit for each month from July through December.

If your employer offers an HSA

Many employers offer an HSA as part of their benefits package, often paired with an HDHP. If yours does, your employer may contribute money to your account, or may let you contribute through payroll deductions (which reduces your taxable income). This is usually the easiest route because the setup is already done and your employer handles the paperwork.

However, you are not required to use your employer's HSA. If your employer's plan has high fees, limited investment options, or poor customer service, you can open your own HSA elsewhere and contribute on your own. Some people do both: they accept their employer's contribution to the employer's HSA, then open a separate HSA at a bank or investment company for additional savings. You can have only one HSA at a time, but you can move money between them.

What to do if you do not have an HDHP

If your current health plan does not may have access to as an HDHP, your first step is to check whether your employer offers one. Ask your benefits administrator or HR department which plans are high-deductible plans and when you can switch. Most employers let you change plans during open enrollment, which usually happens once a year in the fall or early winter.

If your employer does not offer an HDHP, you can look for one on the individual market. Visit your state's health insurance marketplace (usually at healthcare.gov or your state's own site) and filter for HDHP plans. You can also contact insurance companies directly. Keep in mind that switching to an HDHP usually means a lower premium but higher out-of-pocket costs, so compare the total cost before and after to make sure it makes sense for your situation.

If you are self-employed or between jobs, you can purchase an HDHP on the individual market at any time. If you are on Medicaid or Medicare, the rules are different and more restrictive — contact your state Medicaid office or Medicare directly to understand your options.

Frequently Asked Questions

Can I open an HSA if I am retired?

If you are on Medicare, you cannot open a new HSA. If you already had an HSA before you turned 65 and enrolled in Medicare, you can keep the account and use the money, but you cannot add new contributions. If you are retired but not yet on Medicare and have an HDHP, you can open an HSA on the individual market.

What if my spouse has an HDHP but I do not?

If you are covered under your spouse's non-HDHP plan, neither of you can open an HSA. If you are each on your own separate plan — your spouse on an HDHP and you on a different plan — you still cannot open an HSA because you have non-HDHP coverage. You would both need to be on HDHP plans to each have an HSA.

Can I open an HSA if I have a very high deductible plan?

Yes. The IRS sets a minimum deductible for an HDHP, but there is no maximum. A plan with a $5,000 or $10,000 deductible still qualifies as long as it meets the other requirements. Higher deductibles usually mean lower premiums, so some people choose them intentionally to save on monthly costs.

Do I need my employer's permission to open an HSA?

No. As long as you have an HDHP, you can open an HSA on your own at any bank or investment company. Your employer does not need to know or approve. If your employer offers an HSA and contributes to it, you can still open a separate one elsewhere if you want.

What happens to my HSA if I change jobs?

Your HSA stays yours. You keep the account and the money in it, even if you leave your job or your new employer does not offer an HSA. You can continue to use the money for may have access to medical expenses, or you can leave it invested and let it grow. If your new job offers an HSA, you can contribute to both accounts as long as you have only one HSA at a time (you would need to close or merge one).