how an hsa works
as mentioned above people with hdhps can open hsas individuals with hdhps may qualify for hsas and the two are usually paired together to qualify for a health savings account hsa you must meet eligibility standards established by the internal revenue service irs to be eligible you must 1the maximum contribution for an hsa in 2024 is 4 150 for an individual 3 850 for 2023 and 8 300 for a family 7 750 in 2023 23 the annual limits on contributions apply to the total amounts contributed by both the employer and the employee individuals age 55 or older by the end of the tax year can make catch up contributions of an additional 1 000 to their hsas 4an hsa can also be opened at certain financial institutions contributions can only be made in cash while employer sponsored plans can be funded by the employee and their employer any other person such as a family member can also contribute to the hsa of an eligible individual self employed or unemployed individuals may also contribute to an hsa provided that they meet the eligibility requirements 5individuals who enroll in medicare can no longer contribute to an hsa as of the first month of enrollment 6 however they can receive tax free distributions for qualified medical expenses hsa special considerationshdhps have higher annual deductibles the plan pays nothing until you reach these amounts in out of pocket expenses but lower premiums than other health plans 7 the financial benefit of an hdhp s low premium and high deductible structure depends on your personal situation the minimum deductible required to open an hsa is 1 600 for an individual or 3 200 for a family for the 2024 tax year 1 500 and 3 000 respectively for 2023 the plan must also have an annual out of pocket maximum of 8 050 for self coverage for the 2024 tax year 7 500 for 2023 and 16 100 for families for the 2024 tax year 15 000 for 2023 83