Common reasons that people lose HSA eligibility include changing jobs, becoming eligible for Medicare or simply switching insurance plans. Points for owners to be aware of include the following:

• The money belongs to the HSA owner.
• Owner can use the HSA for qualified medical expenses but cannot add money.
• Owner can use as a retirement fund.
• Owner can maximize contribution or remove an excess during final year of eligibility (but must meet certain tax deadlines).
• Keeping it open protects the establishment date.

Yes. An individual with general health Flexible Spending Account coverage is not eligible for an HSA. A health FSA is considered another health plan because an individual can use the money in the health FSA for general health expenses.

Note: Exceptions exist for limited-purpose health FSAs and post-deductible health FSAs. (All photos: Shutterstock)

Yes, unless the HRA meets one of the exceptions: (1) limited-purpose HRA, (2) post-deductible HRA, or (3) retirement HRA.

The HDHP requirement can be explained like this:

To prevent tax breaks for the wealthy: Opponents of HSA legislation were concerned that HSAs would become a tax break for the wealthy.

To partially counter that concern, the laws require that you must be covered by an HDHP and no other health plan.

To encourage consumerism: Congress intended that by requiring a high deductible plan, owners are being encouraged to be good consumers of their health care dollars.

No. However, although there is no minimum age limit on an HSA or earned income requirement, being a dependent on someone else’s tax return disqualifies an individual for an HSA. Most children are dependents on someone else’s tax return.

Common reasons that people lose HSA eligibility include changing jobs, becoming eligible for Medicare or simply switching insurance plans. Points for owners to be aware of include the following:

• The money belongs to the HSA owner.
• Owner can use the HSA for qualified medical expenses but cannot add money.
• Owner can use as a retirement fund.
• Owner can maximize contribution or remove an excess during final year of eligibility (but must meet certain tax deadlines).
• Keeping it open protects the establishment date.