Why HSAs Are Popular
HSAs have grown in popularity in recent years because a health savings account allows you to pay for qualified medical expenses with tax-free dollars.
Who Is Eligible to Set Up an HSA?
There are four requirements to be considered an HSA-eligible individual:
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You must be an adult.
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You cannot be claimed as a dependent on somebody else’s tax return.
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You must have an HSA-qualified high-deductible health plan.
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You cannot have other health coverage that would pay prior to the minimum HSA-qualified plan deductible.
Types of Disqualifying Coverage
Coverage that can make you ineligible for an HSA includes:
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Medicare or Medicaid
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Health coverage through a spouse
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A flexible spending account (FSA) that your spouse has and can use on your expenses
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VA benefits, if they’ve been used in the last 90 days
Meeting All Requirements
If you meet all four of the above requirements, then you are eligible to:
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Set up a health savings account
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Deposit tax-free dollars
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Use those funds for eligible medical expenses
Do You Have to Be the Primary on the Insurance?
There is no requirement to be primary on the insurance to set up and contribute to an HSA.
That’s an important point, so again:
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You do not need to be the primary insured.
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You just need to be an adult with an HSA-qualified high-deductible health plan,
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Not be claimed as a dependent,
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And not have disqualifying coverage.
HSA Rules for Married Couples
Married couples can choose to:
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Set up one or two HSAs
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Split the family contribution however they would like between the two accounts
However:
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Catch-up contributions (for those age 55 and older) must go into an account in that individual’s name
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A couple where both spouses are 55 or older should consider setting up separate HSAs