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) (through your employer or your spouse’s employer) 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.
Related Blogs
Benefits+
PUBLISHED
April 18th, 2025
DOL Updates Model Employer CHIP Notice
DeAnn Deck
The U.S. Department of Labor (DOL), through its Employee Benefits Security Administration (EBSA), has released a new model Employer CHIP Notice with information current ...
Read More
Benefits+
PUBLISHED
March 21st, 2025
Protecting Employees’ Medical Information in the Workplace
DeAnn Deck
Employers obtain employees’ medical information for various reasons, such as verifying a reasonable accommodation request, certifying leave or confirming eligibility for disability benefits. At ...
Read More
Benefits+
PUBLISHED
March 18th, 2025
Systematic Workplace Wellness is the Key to Beating Burnout
Breanna Evans and Matt Mishkind, PhD
The modern American workforce is grappling with significant work-related stress. A recent study from the American Psychological Association found that 77 percent or more ...
Read More
Benefits+
PUBLISHED
March 4th, 2025
What’s good for the environment may not be good for your 401(k) participants
Doug Prince
We’ve had a number of questions from clients about adding environmental, social and governance (ESG) investments in their retirement plan. To date, the law ...
Read More
Benefits+
PUBLISHED
February 7th, 2025
Medicare Part D Disclosures due by March 1, 2025 for Calendar Year Plans
DeAnn Deck
Group health plan sponsors are required to complete an online disclosure form with the Centers for Medicare & Medicaid Services (CMS) on an annual ...
Read More
Benefits+
PUBLISHED
February 3rd, 2025
Balancing Progress with Nonprofit Executive Compensation
Julie Bingham
The median executive pay for nonprofits has risen steadily since 2018. However, due to disparities within the sector, the prominence of short and long-term ...
Read More