I’m getting a lot of questions from clients right now about whether or not they should set up a Health Savings Account.  The answer — for most — is that it’s a moot question.  They probably aren’t eligible.

Just a high deductible isn’t enough. Health insurance plans must meet other criteria to become HSA-eligible.

As this article from The Finance Buff puts it, “a high-deductible health plan is not necessarily a High Deductible Health Plan” (HDHP): Not All High Deductible Plans Are HSA Eligible.

According to IRS Publication 969, to be an eligible individual and qualify for an HSA, you must meet the following requirements:

• You must be covered under a high deductible health plan (HDHP) on the first day of the month.
• You have no other health coverage.
• You are not enrolled in Medicare.
• You cannot be claimed as a dependent on someone else’s tax return.

The IRS defines a high deductible health plan as any plan with a deductible of at least $1,300 for an individual or $2,600 for a family, but as we just noted, not all plans that have a high deductible are eligible.  Value Penguin explains:

In actuality, few are HSA-eligible, because the IRS specifies—deep in its guidelines—that “except for preventive care, [the] plan may not provide benefits for any year until the deductible for that year is met.”

If you aren’t sure if your health insurance qualifies you for an HSA, call the insurer and ask. If you purchase a plan through the federal Marketplace, the answer should be in the plan information available through the exchange website.