HSA Eligibility Help
Any eligible individual may establish an HSA. Eligibility is determined on a monthly basis. To be eligible, an individual must meet all of the following requirements.
- Covered under a high deductible health plan (HDHP) on the first day of the month
- Generally not covered by any health plan that is not an HDHP (exceptions exist for coverage that is not part of an HDHP for accidents, disability, dental care, vision care, long-term care, or permitted insurance)
- Not enrolled in Medicare
- Not able to be claimed as a dependent on another person’s tax return
NOTE: Permitted insurance is insurance under which substantially all of the coverage provided relates to liabilities incurred under workers’ compensation laws, tort liabilities, liabilities relating to ownership or use of property (e.g., automobile insurance), insurance for a specified disease, or illness and insurance that provides a fixed payment for hospitalization.
A health plan is an HDHP if the plan satisfies the following annual deductible and out-of-pocket expense requirements for self-only or family coverage.
Self-only coverage: Annual deductible of at least $1,300 for 2017 and $1,350 for 2018. Also, an out-of-pocket expense (deductibles, co-payments, and other amounts, but not premiums) cap of $6,550 for 2017 and $6,650 for 2018.
Family coverage: Annual deductible of at least $2,600 for 2017 and $2,700 for 2018. Also, an out-of-pocket expense (deductibles, co-payments, and other amounts, but not premiums) cap of $13,100 for 2017 and $13,300 for 2018.
Family coverage with individual deductibles: In cases where family coverage has individual deductibles, the plan is considered an HDHP if no amounts are payable from the health plan until the family has incurred covered medical expenses in excess of the minimum annual deductible ($2,600 for 2017 and $2,700 for 2018), and the plan has an out-of-pocket expense cap of $13,100 for 2017 and $13,300 for 2018.
NOTE: These amounts may be increased for annual cost-of-living adjustments.
EXAMPLE: Which plan is considered an HDHP?
Plan A: Steve Johnson purchases health insurance for himself and his family for 2017. His plan has a $5,000 family deductible with a $1,000 individual deductible.
Plan B: Steve Johnson purchases health insurance for himself and his family for 2017. His plan has a $5,000 family deductible with a $2,600 individual deductible.
Answer: Plan A provides payment of covered medical expenses for any member of Steve’s family if the member has incurred covered medical expenses during the year in excess of $1,000, even if the family has not incurred covered medical expenses in excess of $2,600. Thus, benefits are potentially available under the plan even if the family’s covered medical expenses do not exceed $2,600. Because Plan A provides family coverage with an annual deductible of less than $2,600, the plan is not an HDHP.
Plan B satisfies the requirements for an HDHP because the plan only provides payment for covered medical expenses if any member of Steve’s family incurs covered medical expenses during the year in excess of $2,600.
Yes. A network plan is a plan that generally provides more favorable benefits for services provided by its network of providers than for services provided outside the network. When determining if a plan is an HDHP, the out-of-pocket expense limits for services provided outside of a network of preferred providers are disregarded. In other words, if a plan otherwise meets the requirements of an HDHP, but the out-of-pocket expense limits for out-of-network services exceed the maximum annual out-of-pocket expense limits allowed for an HDHP, the plan will still be considered an HDHP.
EXAMPLE: Is the plan described below an HDHP?
Sarah has self-only coverage under her health plan for 2017. She may access services from either a network of preferred providers, or she may choose to receive services from out-of-network providers. When she uses in-network providers, her health plan has a $1,300 deductible and a $4,000 out-of-pocket expense limit. Alternatively, when she accesses services from out-of-network providers, her deductible is $2,000, and her out-of-pocket expense limit is $12,000.
Answer: Yes. Sarah’s plan is an HDHP because it meets the deductible and out-of-pocket expense restrictions for self-only coverage when she uses network providers. Out-of-network provider expenses are disregarded when determining if an individual has an HDHP.
A plan will still qualify as an HDHP even though it may not have a deductible (or has only a small deductible) for preventive care. Except for preventive care, in order to be an HDHP, a plan may not provide benefits for any year until the deductible for that year is met.