Before you launch your HSA, take a look at your health insurance coverage. To contribute, you must be covered under an HSA-eligible high deductible health plan (HDHP). An HDHP generally requires that you pay out of pocket for medical expenses incurred (excluding certain preventive care expenses) until your deductible is met. Plan coverage kicks in after that. An HDHP may be HSA-eligible if it satisfies the IRS’ annual deductible and out-of-pocket expense limits. But the rules that define an HSA-eligible HDHP can be complicated, so check with your insurance provider or employer to see if your health plan is HSA-eligible.
In addition to having HSA-eligible HDHP coverage, you:
- Cannot be covered by another health plan (with limited exceptions)
- Cannot be enrolled in Medicare, and
- Cannot be eligible to be claimed as a dependent on another person’s tax return.
HSA eligibility is determined as of the first day of each month.