What Disqualifies You From Contributing to an HSA?
Understand the key factors that can prevent you from contributing to a Health Savings Account and how different types of coverage or status may impact eligibility.
A Health Savings Account (HSA) offers tax advantages for medical expenses, but not everyone is eligible to contribute. Certain factors can disqualify you, even if you have an open account. Failing to meet the requirements could lead to tax penalties or excess contribution issues.
Lack of a Qualified High Deductible Plan
To contribute to an HSA, you must be covered by a High Deductible Health Plan (HDHP) that meets IRS requirements. Not all high-deductible plans qualify, and enrolling in the wrong type of coverage can make you ineligible. For 2024, an HDHP must have a minimum deductible of $1,600 for self-only coverage or $3,200 for family coverage. The out-of-pocket maximum cannot exceed $8,050 for an individual or $16,100 for a family. If your plan does not meet these limits, you cannot contribute.
Some plans appear to qualify but include benefits that disqualify them. If your plan covers non-preventive services—such as copays for doctor visits or prescription drugs—before the deductible is met, it does not qualify as an HDHP. Some employer-sponsored plans also provide first-dollar coverage for specific treatments, which can make you ineligible.
State-mandated benefits may also interfere with HSA eligibility. If a state requires insurers to cover certain medical services before the deductible is met, the plan may not comply with federal HDHP rules. This is particularly relevant in states with strict insurance regulations, where even plans labeled as high-deductible may not meet IRS standards.
Enrollment in Medicare
Signing up for Medicare ends your ability to contribute to an HSA. Once enrolled in any part of Medicare—whether Part A, Part B, or both—you are no longer eligible. Medicare is not an HDHP, and IRS rules require HSA contributors to have only HDHP coverage. Even if you are still working and covered by an employer-sponsored HDHP, enrolling in Medicare disqualifies you from making new contributions.
Delaying Medicare enrollment can help, but automatic enrollment can create issues. If you begin receiving Social Security benefits at age 65 or later, you are automatically enrolled in Medicare Part A, often retroactive up to six months. Any HSA contributions made during this period become excess contributions, which must be withdrawn to avoid a 6% excise tax. To prevent this, those who want to continue contributing to an HSA should delay Social Security benefits and actively decline Medicare enrollment.
General-Purpose FSA or HRA Coverage
Participating in a general-purpose Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA) can make you ineligible to contribute. These employer-sponsored benefits cover a wide range of medical expenses, often reimbursing costs before a deductible is met. Since HSA rules require that an individual have only a qualifying HDHP and no other disqualifying coverage, access to these accounts can create a conflict.
Even if you don’t use funds from an FSA or HRA, being eligible for reimbursement makes you ineligible. This includes situations where a spouse elects FSA coverage through their employer, as those funds can often be used for family expenses.
Some employers offer limited-purpose FSAs or post-deductible HRAs, which maintain HSA eligibility. A limited-purpose FSA only reimburses dental and vision expenses, while a post-deductible HRA only covers costs after the HDHP deductible is met. If you want to keep contributing to an HSA, confirming whether these options are available can help avoid an unintended loss of eligibility.
Being Claimed as a Dependent
You cannot contribute to an HSA if you can be claimed as a dependent on someone else’s tax return. This applies even if you are not actually claimed—what matters is whether you meet the IRS criteria for dependency. A taxpayer can claim someone as a dependent if they provide more than half of that person’s financial support and the individual meets residency, relationship, and income requirements outlined in IRS Publication 501.
This often affects young adults who remain on a parent’s health insurance plan. While the Affordable Care Act allows children to stay on a parent’s policy until age 26, this does not automatically mean they are dependents under tax law. If they financially support themselves and do not meet the IRS dependency tests, they may contribute to an HSA as long as they are enrolled in a qualifying HDHP and meet other eligibility criteria. However, if a parent provides substantial financial assistance—such as covering tuition, rent, or other living expenses—HSA contributions may not be allowed.