You need a high-deductible health plan to open an HSA

The single requirement to open a Health Savings Account is enrollment in a high-deductible health plan (HDHP). Your health insurance must meet the IRS definition of an HDHP, which means it has a deductible of at least $1,600 for individual coverage or $3,200 for family coverage in 2024. These thresholds change annually, so check the current year's limits with your insurer or the IRS website.

You cannot open an HSA if you are covered by any other health insurance that is not an HDHP. This includes Medicare, Medicaid, TRICARE, the Veterans Health Administration, or a spouse's non-HDHP plan. If you have coverage through any of these programs, you are ineligible, even if you also have an HDHP. The rule is strict: you must have only HDHP coverage (and certain limited exceptions like dental or vision plans) to maintain HSA may be able to access.

Your employer may offer an HDHP as one of their plan options during open enrollment, or you can purchase one on the individual market through your state's health insurance marketplace or directly from an insurer. Once you confirm your plan qualifies as an HDHP, you can move forward with opening an account.

Key Takeaways

  • You must be enrolled in a high-deductible health plan with a deductible of at least $1,600 (individual) or $3,200 (family) in 2024 to open an HSA.
  • You cannot have any other health insurance coverage at the same time, including Medicare, Medicaid, or a spouse's non-HDHP plan.
  • You must be a U.S. citizen or resident alien with a valid Social Security number or Individual Taxpayer Identification Number.
  • You can open an HSA through a bank, credit union, or financial institution that offers HSA accounts, not through your health insurer.
  • There are no income limits, age limits, or employment requirements — anyone with an HDHP can open an account.

Citizenship and tax identification requirements

You must be a U.S. citizen or resident alien to open an HSA. You will need a valid Social Security number or an Individual Taxpayer Identification Number (ITIN). Your HSA provider will ask for this information when you open the account, and they will verify it against IRS records.

If you are a resident alien, you must have been a resident for the entire calendar year in which you open the account. If you became a resident partway through the year, you cannot open an HSA until the following year. This rule prevents people from opening accounts during a transition period when their tax residency status is unclear.

Age and employment status do not matter

There are no age limits for HSA ownership. You can open an account at any age, as long as you have an HDHP. You do not need to be employed — self-employed people, freelancers, and people with individual health insurance plans can all open HSAs. You do not need to work for a particular type of employer or have a certain job title.

If you are retired and enrolled in Medicare, you cannot open a new HSA because Medicare is not an HDHP. However, if you already had an HSA before turning 65 and enrolling in Medicare, you can continue to use the existing account for withdrawals (though you cannot make new contributions once Medicare begins).

How to verify your HDHP meets IRS standards

Before you open an account, confirm that your health plan actually qualifies as an HDHP. Your insurer or employer's benefits team can tell you whether the plan meets IRS requirements. You can also check the plan's summary of benefits and coverage document, which lists the deductible amount.

The IRS updates HDHP deductible thresholds every January. In 2024, the minimums are $1,600 for individual coverage and $3,200 for family coverage. The maximum out-of-pocket limits are $8,050 for individual coverage and $16,100 for family coverage. If your plan's deductible falls below these minimums, it does not may have access to, and you cannot open an HSA.

Some plans have a deductible that meets the threshold but also have copays for certain services (like preventive care or primary care visits). This is allowed. The plan can still be an HDHP as long as the overall deductible meets the minimum and the out-of-pocket maximum does not exceed the IRS limit.

Opening an account with a bank or financial institution

Once you confirm your HDHP status, you open an HSA directly with a bank, credit union, or financial services company — not with your health insurer. Many major banks offer HSAs, as do online-only financial institutions and companies that specialize in HSA administration.

You will need to provide your name, Social Security number or ITIN, date of birth, and proof of HDHP enrollment. Some providers ask for a copy of your insurance card or a letter from your employer confirming your plan type. The process typically takes a few days to a week.

You can have only one HSA at a time. If you already have an HSA and want to switch providers, you can transfer the balance to a new account or roll it over, but you cannot maintain two active accounts simultaneously. The IRS treats multiple accounts as a violation, and you would owe taxes and penalties on the excess contributions.

What happens if you lose HDHP coverage

If you switch to a non-HDHP plan or gain other health insurance coverage, you stop being may be able to access to make new HSA contributions when ready. You can no longer add money to the account, but you can keep the account open and continue to withdraw funds for may have access to medical expenses.

If you regain HDHP coverage later, you can resume contributions in the month you re-enroll. There is no waiting period or re-process process — you straightforward start contributing again once you have an HDHP.

If you enroll in Medicare, you can no longer contribute to your HSA, but you can withdraw funds for may have access to expenses without penalty. After age 65, non-medical withdrawals are taxed as income but not penalized, which makes the account function more like a traditional retirement savings vehicle.

Frequently Asked Questions

Can I open an HSA if my spouse has a non-HDHP plan?

No. If your spouse's plan is not an HDHP, you cannot open an HSA, even if you have your own HDHP. The rule applies to any other health insurance you or your spouse have. Both of you must have HDHP coverage only (or no coverage) for either of you to maintain an HSA.

What if I enroll in an HDHP partway through the year?

You can open an HSA in the month you enroll in the HDHP. Your contribution limit for that year is reduced based on how many months remain in the calendar year. If you enroll in July, you can contribute one-twelfth of the annual limit for each remaining month (July through December).

Do I need to open an HSA through my employer?

No. Your employer may offer an HSA option, but you can open an account with any bank or financial institution that offers HSAs. You are not required to use your employer's provider. Some people open accounts elsewhere to avoid employer restrictions or to get better investment options.

Can I open an HSA if I am self-employed?

Yes. Self-employed people can open an HSA as long as they have an HDHP. You purchase the HDHP on the individual market through your state's health insurance marketplace or directly from an insurer. You can then open an HSA with any provider and make contributions based on your income.

What if my plan has a $0 deductible for preventive care but a $1,600 deductible for other services?

This plan can still may have access to as an HDHP. The IRS allows plans to cover certain preventive services (like screenings and vaccines) with no deductible. As long as the overall deductible for other care meets the minimum threshold, the plan qualifies, and you can open an HSA.