How to open an HSA account

You open an HSA by choosing a bank or financial institution that offers HSA accounts, providing proof that you have a high-deductible health plan (HDHP), and completing their account application. Most banks, credit unions, and online financial companies that offer HSAs can complete this in 15 to 30 minutes online or over the phone. You will need your Social Security number, proof of your HDHP coverage (usually your insurance card or a letter from your employer), and an initial deposit amount — though many institutions have no minimum.

The timing matters: you can only open an HSA during the months you are actually covered by an HDHP. If you enroll in an HDHP on January 1st, you can open an account anytime in January. If you switch to a regular health plan in March, you cannot open a new HSA in April. This is why many people open an HSA as soon as their HDHP coverage begins, rather than waiting.

Key Takeaways

  • You need an HDHP to open an HSA, and you can only open one while that coverage is active.
  • Most banks, credit unions, and online financial companies offer HSAs, and the application takes 15 to 30 minutes online or by phone.
  • You will need your Social Security number, proof of your HDHP (your insurance card or employer letter), and an initial deposit amount.
  • Your employer may offer an HSA through payroll, which is often simpler than opening one independently and may include employer contributions.

Where to open an HSA account

HSAs are offered by banks, credit unions, online financial institutions, and some investment firms. Common providers include Fidelity, Lively, HealthEquity, Optum Bank, and most major banks like Chase and Bank of America. Your employer may also offer an HSA through their benefits plan — this is often the easiest route because your employer handles the setup and may contribute money on your behalf.

If your employer does not offer an HSA, you can open one independently at any institution that offers them. Compare a few providers on their fees (some charge monthly maintenance fees, others do not), investment options if you plan to invest the money rather than spend it, and whether they offer a debit card for medical expenses. The account itself is free to open; the cost difference comes from ongoing fees and how they handle your money.

Documents and information you will need

Have these items ready before you start the application:

  • Your Social Security number
  • Proof that you have an HDHP — your insurance card, a letter from your employer's benefits department, or a screenshot of your coverage from your insurance company's website
  • Your bank account information if you want to fund the HSA by transfer (optional; you can also mail a check or fund it later)
  • The amount you want to deposit initially (no minimum at most institutions, but some require $25 to $100)

The proof of HDHP coverage is the one document most people forget. The institution needs to verify that your health plan meets the IRS definition of a high-deductible plan — it cannot just be any plan with a high deductible. Your insurance card usually shows the plan name and deductible; that is often enough. If the institution asks for more detail, your employer's benefits summary or a letter from your insurance company stating that the plan qualifies as an HDHP will satisfy them.

Opening an HSA through your employer

If your employer offers an HSA, the process is usually simpler. During open enrollment or when you first enroll in an HDHP through your employer's plan, you will see HSA options in the benefits portal. You choose the HSA provider your employer has partnered with (or sometimes you choose from a list of approved providers), and the employer's benefits team handles the rest. Money is deducted from your paycheck before taxes and deposited into your HSA automatically.

Employer HSAs often come with an employer contribution — your company may add $500 or $1,000 to your account as part of your benefits package. This is money you do not have to earn through payroll deductions. Even if your employer does not contribute, using their plan is usually faster than opening one independently because the employer has already vetted the provider and handled the compliance paperwork.

Opening an HSA independently

If your employer does not offer an HSA or you are self-employed, you can open one on your own. Go to the website of a bank or financial institution that offers HSAs, click the link to open an account, and fill out their application. You will enter your personal information, Social Security number, and proof of HDHP coverage. Most institutions let you upload a photo of your insurance card or a document from your insurance company.

After you submit the application, the institution will verify your HDHP coverage — this usually takes one to three business days. Once approved, you can fund the account by bank transfer, check, or wire transfer. You can then use the HSA debit card (if the institution provides one) or request reimbursement for medical expenses you paid out of pocket. If you are self-employed, you will also need to report your HSA contributions on your tax return (Form 8889) when you file.

Funding your HSA after opening it

Once your account is open, you can add money in several ways. If you opened it through your employer, money is deducted from your paycheck automatically. If you opened it independently, you can transfer money from your bank account, mail a check, or make a wire transfer. Some institutions also let you set up automatic monthly transfers.

The amount you can contribute each year is set by the IRS and changes annually. For 2024, the limit is $4,150 for individual coverage and $8,300 for family coverage. If you are 55 or older, you can contribute an additional $1,000 per year. You do not have to contribute the full amount — you can contribute as little as you want, as long as you stay under the annual limit. Contributions made before April 15th of the following year can be counted toward the previous year's limit if you file your taxes by that date.

What happens after your account is open

Once your HSA is open and funded, you can use it to pay for may have access to medical expenses tax-free. may have access to expenses include doctor visits, prescriptions, dental work, vision care, and medical equipment. You can pay for these expenses using your HSA debit card if your institution provides one, or you can pay out of pocket and request reimbursement from your HSA later.

Keep receipts for all medical expenses you pay with HSA money. The IRS does not require you to submit receipts when you withdraw money, but you must be able to prove that the expense was may have access to if you are ever audited. Many HSA providers also let you invest the money in your account (similar to a 401(k)) if you do not plan to spend it immediately — this allows the money to grow tax-free over time.

Frequently Asked Questions

Can I open an HSA if I am on Medicare?

No. Once you enroll in Medicare, you are no longer may be able to access to contribute to an HSA, even if you also have an HDHP. If you already have an HSA, you can keep it and use it to pay for medical expenses, but you cannot add new money to it. You must stop contributing the month you turn 65 and enroll in Medicare.

What if my employer changes HSA providers?

You can usually transfer your existing HSA balance to the new provider without penalty. This is called a trustee-to-trustee transfer. Contact your old HSA provider and ask them to transfer your balance to the new one. The process typically takes one to two weeks. You do not have to close your old account if you do not want to — some people keep multiple HSAs open.

Do I need to open an HSA in the same year I enroll in an HDHP?

You can open an HSA anytime during the year you have HDHP coverage. However, if you want to make a contribution that counts toward that year's tax deduction, you must open the account by December 31st. If you open one in January of the following year, contributions go toward that year's limit instead.

What if I lose my HDHP coverage mid-year?

You can no longer contribute to your HSA once your HDHP coverage ends, but you can keep the account open and use the money that is already in it to pay for medical expenses. You can also roll over an unused HSA balance to the following year — there is no "use it or lose it" rule like there is with flexible spending accounts.

Can I open an HSA if I am claimed as a dependent?

No. If someone else claims you as a dependent on their tax return, you cannot open an HSA, even if you have an HDHP. This rule applies regardless of whether the person claiming you actually pays for your health insurance. Once you are no longer claimed as a dependent, you can open an HSA.