Health Savings Account (HSA) is a special account owned by an individual where contributions to the account are to pay for current and future medical expenses. HSA’s are used in conjunction with a “High Deductible Health Plan” (HDHP).
A qualified HDHP is insurance that does not cover first dollar medical expenses (except for preventive care). It can be an HMO, PPO, or indemnity plan, as long as it meets the requirements. An HDHP health insurance plan has a minimum deductible of $1,350 for self-only coverage and $2,700 for family coverage. Those amounts are indexed for inflation. The annual out-of-pocket (including deductibles and co-pays) cannot exceed $6,750 for self-only coverage and $13,500 for family coverage. Those rates are also indexed for inflation.
Who is eligible for a Health Savings Account?
Any individual that:
Is covered by an HDHP
Is not covered by other health insurance
Is not enrolled in Medicare
Can’t be claimed as a dependent on someone else’s tax return
There are no income limits on who may contribute to an HSA. There is also no requirement of having earned income to contribute to an HSA.
Other health coverage that is allowed for you to still be eligible for an HSA include:
Specific disease or illness insurance and accident, disability, dental care, vision care and long-term care insurance
Employee Assistance Programs, disease management program or wellness program. (These programs must not provide significant benefits in the nature of medical care or treatment)
Drug Discount cards
Eligibility for VA Benefits. (Unless you have actually received VA health benefits in the last 3 months.)
