How to open a Health Savings Account
You open an HSA through a bank, credit union, or insurance company that offers HSA accounts — not through your employer or the government. You will need to be enrolled in a high-deductible health plan (HDHP), have no other health coverage that disqualifies you, and have a Social Security number or tax ID. The process takes about 15 minutes online or over the phone, and you can start contributing immediately after the account opens.
Most people open an HSA at the same institution where they bank or get insurance, because the paperwork is simpler and transfers between accounts are easier. You can also shop for HSA providers separately — some offer better investment options or lower fees than others. The account itself is separate from your health insurance; your insurance company does not hold your HSA money.
Key Takeaways
- You must be enrolled in a high-deductible health plan and have no other disqualifying coverage before you can open an HSA.
- Banks, credit unions, and insurance companies all offer HSA accounts; you choose the provider, not your employer.
- You will need your Social Security number, proof of HDHP enrollment, and basic personal information to open an account.
- Once your account is open, you can contribute money immediately and use it for may have access to medical expenses right away.
- You can move your HSA to a different provider at any time without penalty, though some providers charge transfer fees.
Verify you meet the HSA requirements before you start
The IRS sets strict rules about who can open an HSA. You must be enrolled in a high-deductible health plan as your only health coverage. If you have Medicare, Medicaid, TRICARE, the Veterans Administration, or a spouse's non-HDHP plan, you cannot open an HSA. You also cannot have a Health Flexible Spending Account (FSA) or a Dependent Care FSA at the same time, though you can have a Limited-Purpose FSA that covers only dental and vision.
Check your health plan documents or call your insurance company to confirm your plan qualifies as an HDHP. For 2024, an HDHP must have a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. The plan must also have an out-of-pocket maximum (the most you pay before insurance covers everything) of no more than $4,000 for individual or $8,000 for family. These numbers change each year.
If you are unsure whether your plan qualifies, ask your insurance company directly — they can tell you in one call. Do not rely on the plan name alone; some plans that sound like HDHPs do not meet the IRS definition.
Gather the documents and information you will need
Have your Social Security number or Individual Taxpayer Identification Number ready. You will also need proof that you are enrolled in an HDHP — your insurance card, a letter from your insurance company, or a screenshot of your plan details from your insurer's website all work. Some providers ask for your employer's name and the date your coverage started.
You will also provide basic personal information: your full legal name, date of birth, address, and phone number. If you are opening the account at a bank or credit union, they may ask for a driver's license or passport. Have your employer's name and address if you get insurance through work, though this is not required to open the account.
Choose an HSA provider and open your account
You can open an HSA at your bank, credit union, or insurance company. You can also open one at a dedicated HSA provider like HealthEquity, Lively, or Fidelity. Compare a few options if you plan to invest the money rather than just spend it — investment options and fees vary widely. Some providers charge monthly maintenance fees (typically $2 to $5), while others waive fees if you keep a minimum balance.
Most providers let you open an account online in 10 to 15 minutes. You will upload or provide your proof of HDHP enrollment, enter your personal information, and choose whether you want a debit card, checks, or both. Some providers mail a debit card; others issue one immediately online. You can also request paper checks or set up transfers to your regular bank account.
After you submit your application, the provider will verify your information and your HDHP status. This usually takes one to three business days. You will receive a confirmation email with your account number and login information. You can start contributing money as soon as the account is open, even if you have not received your debit card yet.
Make your first contribution
You can contribute money to your HSA through a bank transfer, check, or automatic payroll deduction. If your employer offers payroll deduction, that is usually the easiest route — the money comes out of your paycheck before taxes, which lowers your taxable income. You set up payroll deduction through your employer's benefits system, not through the HSA provider.
If you are self-employed or your employer does not offer payroll deduction, you can transfer money from your bank account to your HSA online. Log into your HSA account, find the transfer or deposit option, and link your bank account. Most transfers take one to three business days. You can also mail a check to the HSA provider's address, though this takes longer.
For 2024, you can contribute up to $4,150 if you have individual HDHP coverage or $8,300 if you have family coverage. These limits change each year. If you open your account partway through the year, you can still contribute the full annual amount, but you must do so by April 15 of the following year to claim the deduction on that year's taxes.
Set up how you will use your HSA money
Decide whether you want a debit card, checks, or both. A debit card lets you pay for may have access to medical expenses directly at the provider's office or pharmacy. Checks are useful if a provider does not accept cards. Some people use neither and instead pay out of pocket, then request a reimbursement from their HSA later — this method lets the HSA money stay invested longer.
If your HSA provider offers investment options, you can choose to invest some or all of your balance in mutual funds or other securities. This is optional; you can also leave the money in a cash account that earns interest. Investment options make sense if you do not plan to use the money this year and want it to grow. Cash accounts are simpler if you expect to use the money soon for medical expenses.
Understand what happens at tax time
Your HSA provider will send you a Form 5498-SA by May 31 each year, showing how much you contributed. If you made contributions through payroll deduction, your employer will have already reduced your taxable income, so you do not need to do anything else. If you made contributions yourself, you will claim them as a deduction on your tax return using Form 8889.
Keep records of all your medical expenses and HSA withdrawals. The IRS can ask you to prove that money you withdrew was used for may have access to medical expenses. may have access to expenses include doctor visits, prescriptions, dental work, vision care, and many other health-related costs, but not health insurance premiums (with a few exceptions) or cosmetic procedures.
Frequently Asked Questions
Can I open an HSA if I am self-employed?
Yes, as long as you have a high-deductible health plan. You cannot use payroll deduction, so you will transfer money from your bank account to your HSA instead. You claim your contributions as a deduction on your tax return using Form 8889.
What if my employer already opened an HSA for me?
Your employer may have set up a payroll deduction account, but you still own the account and can move it to a different provider whenever you want. You are not locked in. If you want to switch providers, contact your current HSA provider about transferring the balance.
Can I open an HSA after my HDHP coverage starts?
Yes. You can open an HSA anytime during the year you are enrolled in an HDHP. However, if you want to claim contributions on that year's taxes, you must open the account and make contributions by April 15 of the following year.
What if I lose my HDHP coverage partway through the year?
You can no longer contribute to your HSA once you enroll in non-HDHP coverage. Money already in your account stays there and can be used for may have access to medical expenses anytime in the future, even after you leave the HDHP.
Do I need to use my HSA debit card, or can I pay out of pocket and reimburse myself later?
You can do either. Paying out of pocket and requesting reimbursement later lets your HSA balance stay invested and grow. Keep receipts and records of all expenses you plan to reimburse yourself for, in case the IRS asks for proof.