You must meet the following requirements to be an eligible individual and qualify for an HSA (Health Savings Account).
- 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's permitted, see Other Health Coverage, below.
- You are not enrolled in Medicare.
- You cannot be claimed as a dependent on anyone else's tax return.
High Deductible Health Plan (HDHP): An HDHP has both of the following:
- An higher annual deductible than standard 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.
- The HDHP may provide preventive care benefits with or without a deductible below the minimum annual deductible.
Other Health Coverage: You (and spouse, if there is family coverage) typically cannot have any health coverage that is not an HDHP. However, you can still be an eligible individual even if the spouse has non-HDHP coverage provided but you are not covered by that plan.
You can have additional insurance that provides benefits but only for the following items:
- Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to use or ownership of a property.
- A specific illness or disease.
- A fixed amount per day (or other period) of hospitalization.
You can have coverage, whether provided through insurance or otherwise, also for the following items:
- Dental care.
- Vision care.
- Long-term care.
Plans in which significantly 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 Health Savings Account.
For more in-depth information about qualifying for an HSA, please reference IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.