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.


For employees, the pre-tax payroll deferral feature of a Health Savings Account can be enticing. And if they’re able to save more funds in their HSA than they spend — perhaps even save enough to add investing to the mix — all the better.

For employers, offering an HSA option can be a useful addition to a benefits package. For brokers and advisors, HSAs offer a way to expand the scope of their services or offerings.

But how does one get from “my employees could use this” to “my employees are taking advantage of the HSA option”? Although establishing and using an HSA can be fairly straightforward for an employee, employers as well as brokers and advisors need to be aware of HSA eligibility requirements. The gallery above shows five HSA eligibility FAQs to know.

We have excerpted and/or edited for space the 5 FAQs on the slides above from the book 2019 Health Savings Accounts Facts, by National Underwriter, our colleagues here at ALM Media.