Health plans that pair with HSAs must have a high deductible and meet IRS rules

Not every health insurance plan works with an HSA. Your plan must be what the IRS calls a High Deductible Health Plan (HDHP). This means your deductible — the amount you pay out of pocket before insurance kicks in — has to be at least $1,550 for individual coverage or $3,100 for family coverage in 2024. These dollar amounts change each year, so check the current year's limits with your insurance company or the IRS website.

An HDHP also sets a cap on your total out-of-pocket costs. For 2024, that maximum is $3,850 for individual plans and $7,700 for family plans. Once you hit that limit, your insurance covers everything at 100 percent. You cannot pair an HSA with a plan that has a lower deductible, even if you want to.

The key rule: your plan must be an HDHP, and you must have no other health coverage besides that plan. If you are covered by a spouse's low-deductible plan, Medicare, Medicaid, or TRICARE, you cannot open or contribute to an HSA, even if you also have an HDHP.

Key Takeaways

  • Your health plan must be labeled an HDHP with a deductible of at least $1,550 (individual) or $3,100 (family) in 2024 to work with an HSA.
  • You cannot have any other health coverage at the same time, including a spouse's plan, Medicare, or Medicaid.
  • Your insurance company will tell you whether your plan qualifies as an HDHP when you enroll or review your coverage.
  • The deductible and out-of-pocket limits change yearly, so the plan that may have access to last year may not may have access to this year.

Where to find which plans are HDHPs

When you shop for health insurance through your employer, the marketplace, or an insurance broker, plans that may have access to as HDHPs are usually labeled that way. Look for the words "High Deductible Health Plan" or "HDHP" in the plan name or description. If you are unsure, ask your employer's benefits team or the insurance company directly: "Is this plan an HDHP that qualifies for an HSA?"

If you buy insurance through the federal marketplace (Healthcare.gov) or your state's marketplace, you can filter by plan type. Some marketplaces let you search for HDHP plans specifically. If you buy directly from an insurance company, their website usually shows which plans are HDHPs.

Your employer may offer multiple HDHP options at different price points. Some have lower premiums but higher deductibles; others have higher premiums but lower deductibles. All of them, as long as they meet the IRS deductible minimum, work with an HSA.

Plans that do not work with HSAs

Any plan with a deductible below the IRS minimum does not may have access to. This includes most HMO and PPO plans offered by employers. These traditional plans typically have deductibles of $500 to $1,000, which is below the HDHP threshold. If your employer offers both a traditional plan and an HDHP, you have to choose one or the other — you cannot be covered by both.

Plans with a Health Savings Account alternative built in — sometimes called "HSA-compatible" plans — are still HDHPs and do work with HSAs. The difference is that some employers set up an HSA for you automatically when you enroll, while others let you open one on your own. Either way, the plan itself must still meet the HDHP rules.

Medicare, Medicaid, TRICARE, and Veterans Affairs coverage disqualify you from using an HSA, even if you also have an HDHP. If you turn 65 and enroll in Medicare, you must stop contributing to your HSA that same month, though you can keep the money already in it and spend it on medical costs.

What happens if your plan changes mid-year

If you switch from an HDHP to a non-HDHP plan during the year — say, through a job change or a life event like marriage — you can no longer contribute to your HSA starting the month your new coverage begins. You keep the money already in the account and can still spend it on medical costs, but you cannot add more.

If you switch from a non-HDHP to an HDHP, you can open an HSA and start contributing in the month your new HDHP coverage starts. You do not have to wait until January.

Some employers let you change plans only during open enrollment in the fall, while others allow changes if you have a may have access to life event (marriage, birth, job loss, loss of other coverage). Check your employer's plan rules or your marketplace's rules for when you can switch.

How to confirm your plan qualifies before you enroll

Before you sign up for a plan, ask the insurance company or your employer: "Does this plan meet the IRS definition of an HDHP for the year I am enrolling?" Get the answer in writing if you can, because you will need to prove your plan qualifies when you open an HSA.

You can also check the IRS website or call the IRS directly at 1-800-829-1040. They can tell you whether a specific plan you are considering meets the HDHP rules. Some insurance companies publish a list of their HDHP plans on their website.

If you are buying through an employer, your benefits team should have a summary of each plan's deductible and out-of-pocket maximum. Compare those numbers to the current year's IRS limits. If the deductible is at least $1,550 (individual) or $3,100 (family), the plan qualifies.

Frequently Asked Questions

Can I use an HSA with a plan that has a $1,000 deductible?

No. The deductible must be at least $1,550 for individual coverage or $3,100 for family coverage in 2024. Plans with lower deductibles do not may have access to as HDHPs, even if they are otherwise similar to HDHP plans. Check the current year's IRS limits, as they change annually.

What if my employer offers an HDHP but does not set up an HSA for me?

You can open an HSA on your own through a bank, credit union, or financial services company. You do not have to use your employer's HSA provider. Just make sure you enroll in the HDHP first, because you cannot open an HSA without HDHP coverage.

If I have Medicare, can I contribute to an HSA?

No. Medicare coverage disqualifies you from HSA contributions. If you are already contributing to an HSA and turn 65, you must stop contributing in the month you enroll in Medicare. You can keep and spend the money already in the account on medical costs.

Do all HDHP plans have the same deductible?

No. HDHPs can have different deductibles as long as each one meets the IRS minimum. One employer might offer an HDHP with a $1,550 deductible and another with a $3,000 deductible. Both may have access to for an HSA, but your out-of-pocket costs will differ.

Can I have an HSA if my spouse has a low-deductible plan?

Not if you are on your spouse's plan. If you are covered by a spouse's non-HDHP plan, you cannot contribute to an HSA. However, if you have your own separate HDHP coverage, you can open an HSA even if your spouse has a different plan.