Who Is Eligible for Health Savings Accounts?

A Health Savings Account (HSA) is a health insurance plan that combines a savings plan with a high deductible heath insurance policy. With an HSA, any contributions you make to the savings element earn interest on a tax-deferred basis. You can also withdraw money from the savings account on a tax-free basis as long as the money is used to pay covered medical expenses. To be eligible for an HSA, you must meet certain eligibility requirements in accordance with IRS regulations.

Age and Health

• You must be under age 65 to be eligible for an HSA. When you reach 65, you would then be eligible to receive health care from the government-sponsored Medicare program. You also need to meet the health requirements that are mandated by the insurance carrier for your high deductible health plan (HDHP).

High Deductible Health Plan

• Your HDHP must meet the requirements mandated by the IRS. As of 2011, this means that for a single person, the plan deductible must be at least $1,200 and $2,400 for a family. In addition, the maximum permitted for out-of-pocket expenses is $5,950 for a single person and $11,900 for a family.

No Additional Coverage

• You are not eligible for a HSA if you have major medical health coverage from another source, such as a group health insurance plan at work. However, if you have a limited benefit plan that pays a scheduled amount for things like doctor visits without providing full major medical coverage, you may be eligible for the HSA.

No Dependency

• You may not be able to be claimed as a dependent by another person and be eligible for an HSA. For example, if you are a college student who is not covered under your parents' health care policy, you cannot obtain HSA coverage if your parents are still claiming you as a dependent.