Who is eligible to open an HSA?*

To be eligible to open an HSA an individual must meet the following requirements:

• Have a qualified high deductible health plan (HDHP).
  • Below are the minimum required deductibles for 2008:
    • $1,100 for self-only coverage
    • $2,200 for family coverage
  • Below are the maximum out of pocket limits for 2008:
    • $5,600 for self-only coverage
    • $11,200 for family coverage
• Have no other health coverage except what is permitted as other health coverage (see detail 1 below).
• The individual cannot be enrolled in Medicare.
• The individual cannot be claimed as a dependent on someone else's tax return.

Additional Details:

1. To be eligible for a health savings account, an individual must be covered by an HSA-qualified HDHP and must not be covered by other health insurance that is not an HDHP.  Certain types of insurance are not considered "health insurance" and will not jeopordize 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 do not pay significant medical benefits.
2. As long as an individual is covered under an HDHP policy, they can be eligible for an HSA (assuming all other eligibility requirements are met).  Individuals may still be eligible for an HSA even if the policy is in a spouse's name.
3. Individuals cannot have an HSA if a spouse's FSA or HRA can pay for any medical expenses before the HDHP deductible is met.
4. Individuals enrolled in Medicare are not eligible for an HSA.  However, if an individual had an HSA before being enrolled in Medicare, they can keep the account but are not eligible to make additional contributions.
5. If an individual recieved any health benefits from the Veterans Administration or one of their facilities, including prescription drugs, in the last three months they are not eligible for an HSA.
6. General flexible spending arrangements (FSAs) may make an individual ineligible for 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.
7. General health reimbursement arrangements (HRAs) may make an individual ineligible for 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) HRA, then an individual may still be eligible for 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 for an HSA.
8. An high-deductible non-HDHP (PPO, HMO) will not prevent eligibility, if the deductible meets or exceeds the HDHP required minimum.
9. An individual is not eligible for an HSA if their employer pays or reimburses the individual's medical expenses below the minimum HDHP deductible.
10. If an individual has an embedded individual deductible in family HDHP coverage they are eligible for an HSA if it is not less than the minimum required family HDHP deductible.

* 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 healthcare professional.  All tax references are on the federal level.  State taxes may vary.  Please consult your tax advisor.