In order to open and contribute to an HSA, an individual must be enrolled in an HSA-qualified High Deductible Health Plan (HDHP). In addition, he/she cannot be enrolled in Medicare or Medicaid, cannot be eligible to be claimed as a dependent on another person’s tax return, and must be over 18 years of age. If an individual meets these guidelines, he/she, the employer, and/or any third party are able to make contributions into their HSA up to the IRS allowable limits for the year.
A qualified high deductible health plan is health insurance that meets certain minimum deductibles and maximum out-of-pocket expense requirements. A deductible is the amount you pay before insurance the insurance plan starts to pay. Out-of-pocket expenses include deductibles, co-insurance and other amounts, but not premiums. Most plans have deductibles that are higher than the minimum and may have lower out-of-pocket amounts. For 2019, the minimum deductible for a single plan must be at least $1,350 for single and $2,700 for a family. For 2020, the minimum deductibles will be $1,355 for single and $2,710 for family. For 2019, the maximum out-of-pocket amount for a single coverage is $6,750 and $13,500 for family coverage. For 2020, the maximum out-of-pocket amount for single coverage will be $6,900 and $13,800 for family coverage.