fbpx
Insurica
Pay Now
Client Login

Only eligible individuals can establish HSAs and make contributions (or have them made on their behalf). An individual’s eligibility for HSA contributions is typically determined monthly as of the first day of the month. In general, an HSA contribution can only be made for months in which the individual meets all the eligibility requirements.

To be HSA-eligible for a month, an individual must:

  • Be covered by a high deductible health plan (HDHP) on the first day of the month;
  • Not be covered by other health coverage that is not an HDHP (with limited exceptions);
  • Not be enrolled in Medicare; and
  • Not be eligible to be claimed as a dependent on another person’s tax return.

An exception to this general rule is the last-month rule, in which an individual is treated as HSA-eligible for the entire year if they satisfy the HSA eligibility requirements on Dec. 1 of the year.

In the case of married individuals, each spouse who is an eligible individual who wants to have an HSA must open a separate HSA. Married couples cannot have a joint HSA, even if they are covered by the same HDHP. Also, if another taxpayer is entitled to claim an individual as a dependent, the individual is not eligible for HSA contributions, even if the other person does not actually claim the dependent.

In addition, an individual who is covered by a standard type of health flexible spending account (FSA) or health reimbursement arrangement (HRA) cannot make HSA contributions. However, there are certain types of health FSAs and HRAs that are compatible with HSA eligibility, such as post-deductible or limited-purpose health FSAs or HRAs.

Eligibility Criteria

To be HSA-eligible, an individual must:

  • Be covered by an HDHP;
  • Not be covered by other health coverage that is not an HDHP (with certain exceptions);
  • Not be enrolled in Medicare; and
  • Not be eligible to be claimed as a dependent on another person’s tax return.

Key Considerations

  • Eligibility for HSA contributions is generally determined monthly as of the first day of the month.
  • An individual does not need to be an employee to be eligible for HSA contributions, although nonemployees cannot make pre-tax HSA contributions through a cafeteria plan.
  • In general, individuals with coverage under a health FSA or HRA are not HSA-eligible.

Additional Resources

IRS Increases 2023 HSA and HDHP Contributions

The IRS Takes on Inflation: Major Changes in HSA and HDHP for 2024

Annual Health FSA Contribution Limit to Increase in 2023

For more employee benefits information, contact INSURICA today.

This Compliance Snapshot is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2023 Zywave, Inc. All rights reserved.

About the Author

INSURICA
INSURICA

Share This Story

Stay Updated

Subscribe to the INSURICA blog and receive the latest news direct to your inbox.

Subscribe to the blog

Related Blogs

OSHA Announces Top 10 Violations for 2024

December 3rd, 2024|Blog, Risk Management, Trending|

OSHA recently revealed its top 10 most frequently cited standards in the 2024 fiscal year using preliminary data. This information is valuable for businesses of all kinds, as it helps them identify common exposures that affect their workforce and gives them the information they need to plan their compliance programs.

Holiday Shopping Online? Remember These Cybersecurity Tips

December 2nd, 2024|Blog, Personal Insurance|

Online shopping has made it easier than ever to peruse the wares of various businesses and vendors from the comfort of your own home as you search for the perfect gifts this holiday season. However, conducting transactions over the internet always involves inherent risks, as cybercriminals may be lying in wait.

Most Common Vehicle and Driver Violations Leading to Out-of-Service Orders in 2024 Fiscal Year

December 1st, 2024|Blog, Risk Management, Trending|

To help drivers of commercial motor vehicles (CMVs) remain safe and keep trucking businesses in compliance with the Federal Motor Carrier Safety Regulations and Hazardous Materials Regulations, the Federal Motor Carrier Safety Administration records the number of violations discovered through roadside inspections conducted by Motor Carrier Safety Assistance Program inspectors.

Go to Top