Who's Eligible to Open an HSA?
To be eligible to open an HSA, an individual must meet the following requirements:
- Have an HSA-qualified health plan.
- Minimum required deductibles:
- $1,250 for individual coverage in 2013 and 2014
- $2,500 for family coverage in 2013 and 2014
- Maximum out-of-pocket limits:
- $6,250 for individual coverage in 2013—$6,300 in 2014
- $12,500 for family coverage in 2013—$12,700 in 2014
- Have no other health coverage except what is permitted as other health coverage (see #1 below).
- Not be enrolled in Medicare.
- Not be claimed as a dependent on someone else's tax return.
- To be eligible to open an HSA, an individual must be covered by an HSA-qualified health plan and must not be covered by other health insurance that is not an HSA-qualified plan. Certain types of insurance are not considered "health insurance" and will not jeopardize an individual's eligibility for an HSA. Automobile, dental, vision, disability, and long-term care insurance are allowed. Individuals may also have coverage for a specific disease or illness as long as it pays a specific dollar amount when the policy is triggered. Wellness programs offered by employers are also permitted if they don't pay significant medical benefits.
- As long as an individual is covered under an HSA-qualified policy, they can be eligible to open an HSA (assuming all other eligibility requirements are met). Individuals may still be eligible to open an HSA even if the policy is in a spouse's name.
- Individuals can't open an HSA if a spouse's flexible spending account (FSA) or health reimbursement arrangement (HRA) can pay for any medical expenses before the HSA-qualified plan deductible is met.
- Individuals enrolled in Medicare aren't eligible to open an HSA. However, if an individual had an existing HSA before being enrolled in Medicare, they can use the account for qualifed expenses, they just aren't eligible to make additional contributions.
- If an individual received any health benefits from the Veterans Administration or one of their facilities, including prescription drugs, in the three months prior, they aren't eligible to open an HSA.
- A standard health care FSA may make an individual ineligible to open an HSA. If an employer offers a "limited purpose" (limited to dental, vision or preventive care) or "post deductible" (pay for medical expenses after the plan deductible is met) FSA, then an individual is still eligible for an HSA.
- A standard HRA may make an individual ineligible to open an HSA. If an employer offers a "limited purpose" HRA (limited to dental, vision or preventive care) or "post-deductible" HRA (to pay for medical expenses after the plan deductible is met), then an individual may still be eligible to open an HSA. If an individual's employer contributes to an HRA that can only be used when the individuals retires, the individual is still eligible to open an HSA.
- A high-deductible qualified health plan (PPO, HMO) will not prevent eligibility if the deductible meets or exceeds the HSA-qualified plan required minimum.
- An individual is not eligible for an HSA if their employer pays or reimburses the individual's medical expenses below the minimum HSA-qualified health plan deductible.
- If an individual has an embedded individual deductible in family HSA-qualified coverage, they are eligible for an HSA, if it is not less than the minimum required family health plan deductible.
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HealthEquity does not provide medical or tax advice. Content should not in any case replace professional medical or tax advice. If you have questions regarding a medical condition, please consult a qualified health care professional. All tax references are on the federal level. State taxes may vary. Please consult your tax adviser.