Opening a Health Savings Account: The Steps and What You Need

You need an HSA-may be able to access health plan first, then open an account at a bank or financial institution

Starting a Health Savings Account (HSA) is not something you do on your own. You must be enrolled in a High Deductible Health Plan (HDHP) — a specific type of health insurance — before you can open an HSA. Your health plan provider does not automatically open one for you. Once you have the HDHP in place, you choose where to open your HSA account, fund it, and decide how to invest the money inside it.

The order matters: HDHP first, then HSA. If you try to open an HSA without an HDHP, the financial institution will reject your process because the IRS requires proof of HDHP coverage before an account can exist.

Key Takeaways

You must be enrolled in an HDHP through your employer, the marketplace, or a private insurer before opening an HSA.
You can open an HSA at a bank, credit union, or investment firm — your health plan does not do this for you.
You will need your HDHP plan documents or a letter from your insurer confirming HDHP may be able to access when you open the account.
You can contribute money to your HSA only during the calendar year you are covered by an HDHP, with a important date of April 15 of the following year.
HSA funds roll over year to year and belong to you, even if you change jobs or health plans.

Step 1: Confirm you have an HDHP and meet the coverage rules

Check your health plan documents or your insurer's website to confirm your plan qualifies as an HDHP. The plan must meet IRS minimum deductible amounts — these change each year. For 2024, an HDHP must have a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. Your plan paperwork will state the deductible amount clearly.

You also cannot be covered by any other health insurance that is not an HDHP. This includes Medicare, Medicaid (with limited exceptions), or a spouse's non-HDHP plan. If you have coverage through multiple sources, you may not be HSA-may be able to access. Contact your insurer or employer's benefits office to confirm your specific situation.

Step 2: Gather your HDHP documentation

Before you contact a financial institution, collect proof that you have HDHP coverage. This is usually your health plan's Summary of Benefits and Coverage (SBC), your insurance card, or a letter from your insurer stating your plan is HDHP-may be able to access. Some employers provide an HSA may be able to access letter when you enroll in the HDHP.

You will need this document when you open your account. The financial institution must verify your HDHP status before accepting your process, so having it ready speeds the process.

Step 3: Choose where to open your HSA

You can open an HSA at a bank, credit union, or investment firm. Your employer may offer a preferred HSA provider as part of your benefits package, but you are not required to use it. Some employers contribute money to your HSA automatically if you enroll; others do not.

Common HSA providers include large banks (Chase, Bank of America), credit unions, and dedicated HSA administrators like HealthEquity, Lively, and Fidelity. Compare what each charges: some have monthly maintenance fees, some charge per transaction, and some are free. Look at whether they offer investment options (stocks, mutual funds) or just a savings account, depending on how long you plan to keep the money in the account.

Step 4: Open the account and provide proof of HDHP coverage

Contact your chosen financial institution online, by phone, or in person. You will fill out an process that asks for your name, Social Security number, address, and HDHP plan details. Have your HDHP documentation ready — the institution will ask for your plan name, the deductible amount, or a copy of your plan documents.

Some institutions verify HDHP may be able to access electronically with your insurer; others accept a copy of your plan documents or insurance card. The process usually takes a few business days. Once approved, you will receive account details and can begin funding the account.

Step 5: Fund your account and decide on contributions

You can contribute money to your HSA through payroll deduction (if your employer offers it), a direct transfer from your bank account, or a check deposit. If you contribute through payroll, your employer deducts the money before taxes are calculated, which reduces your taxable income.

The IRS sets annual contribution limits, which change each year. For 2024, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage. You can contribute only during the calendar year you are covered by an HDHP. If you enroll mid-year, you can still contribute for that full year, but the important date to contribute for any given year is April 15 of the following year.

Step 6: Choose how to invest or hold the money

Once your account is open and funded, you decide what to do with the money. You can leave it in a savings account earning interest, or you can invest it in mutual funds, stocks, or other options if your HSA provider offers them. Money you do not spend on may have access to medical expenses stays in the account and grows tax-free year after year.

Many people use their HSA as a long-term investment account, spending out-of-pocket on medical expenses and letting the HSA balance grow. Others use it to pay medical bills directly. There is no requirement to spend the money in any particular year — it is yours to use whenever you need it for may have access to medical expenses.

Frequently Asked Questions

Can I open an HSA if my employer does not offer one?

Yes. You can purchase an HDHP through your state's health insurance marketplace or directly from a private insurer, then open an HSA at any financial institution. You will not have payroll deduction, so you will fund the account yourself, but the account works the same way.

What happens to my HSA if I change jobs or lose my HDHP coverage?

The account stays yours. You keep the money and can continue to use it for may have access to medical expenses for the rest of your life. You cannot make new contributions once you lose HDHP coverage, but the balance does not disappear. If you regain HDHP coverage later, you can resume contributions.

Do I have to use my employer's HSA provider?

No. If your employer offers an HSA through a specific provider, you can choose to open one elsewhere instead. However, some employers contribute money to the account only if you use their designated provider, so check your benefits materials first.

What if I am self-employed?

You can purchase an HDHP as a self-employed person through the marketplace or a private insurer, then open an HSA at any financial institution. You contribute to the account yourself and can deduct contributions on your tax return.

Can I open an HSA and not use it right away?

Yes. You can open an account, fund it, and let the money sit. There is no requirement to spend it in any particular year or to use it at all. The money grows tax-free and is available whenever you need it for may have access to medical expenses.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.