Who qualifies to have an HSA (Health Savings Account)?
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
- You have a high deductible health plan (HDHP), described below, on the first day of the month.
- You have no other health coverage except what is permitted under Other Health Coverage, below.
- You are not enrolled in Medicare.
- You cannot be claimed as a dependent on someone else's tax return.
High Deductible Health Plan (HDHP): An HDHP has both of the following:
- A higher annual deductible than typical health plans, AND
- A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Out-of-pocket expenses include co-payments and other amounts, but do not include premiums.
An HDHP may provide preventive care benefits without a deductible or with a deductible below the minimum annual deductible.
Other Health Coverage: You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan.
You can have additional insurance that provides benefits only for the following items:
- Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property.
- A specific disease or illness.
- A fixed amount per day (or other period) of hospitalization.
- You can also have coverage (whether provided through insurance or otherwise) for the following items:
- Dental care.
- Vision care.
- Long-term care.
Plans in which substantially all of the coverage is through the above listed items are not HDHPs. For example, if your plan provides coverage substantially all of which is for a specific disease or illness, the plan is not an HDHP for purposes of establishing an HSA.
For more in-depth information about qualifying for an HSA, please reference IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.