What qualifies as an HSA-eligible health plan in 2024?

What qualifies as a high-deductible health plan?

True to its name, the deductible is higher. Plans will vary, but generally a minimum of $1,650 for individuals and $3,300 for families¹. Will vary by plan and by employer, but generally are lower. Out-of-pocket limits are higher in an HDHP.

What is the 12 month rule for HSA?

It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.

What does IRS consider a high-deductible health plan?

HDHP deductible and out-of-pocket maximum

For 2025, the Internal Revenue Service (IRS) defines a high-deductible health plan as any plan with an annual deductible of at least $1,650 for an individual or $3,300 for a family.

What is the deductible limit for 2024?

For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023.

How do I know if something is HSA-eligible?

What makes you ineligible for HSA?

An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally cannot make contributions to an HSA.

Can I use HSA for gym membership?

Gym memberships. While some companies and private insurers may offer discounts on gym memberships, you generally can't use your FSA or HSA account to pay for gym or health club memberships. An exception to that rule would be if your doctor deems fitness medically necessary for your recovery or treatment.

Is sunscreen HSA-eligible in 2024?

Sunscreen is eligible for reimbursement with flexible spending accounts (FSA), health savings accounts (HSA), and health reimbursement accounts (HRA). They are not eligible for reimbursement with dependent care flexible spending accounts and limited-purpose flexible spending accounts (LPFSA).

What happens if you contribute to HSA without HDHP?

The annual HSA contribution limit for new HSAs is prorated for every month you weren't covered by an HDHP. But under the 13-month rule, you can still contribute the full amount to your HSA, even if you didn't have an HSA-eligible HDHP for the entire year.

Are vitamins HSA-eligible?

In general, vitamins are not considered an HSA eligible expense unless they are prescribed by a doctor for a specific medical condition. For example, if your doctor prescribes prenatal vitamins during pregnancy or recommends vitamin D supplements to treat a deficiency, those could be eligible expenses under your HSA.

How to qualify for HSA 2024?

HSA eligibility

To contribute to an HSA, you must be enrolled in an HSA-eligible health plan. For 2024, this means: It has an annual deductible of at least $1,600 for self-only coverage and $3,200 for family coverage.

What makes a health plan HSA-eligible?

HSA-qualified HDHPs must have a higher annual deductible than regular individual health insurance plans, a maximum limit on annual deductible and medical costs, and offer no insurance coverage until the plan participant reaches the deductible.

What is the downside of an HSA?

Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).

What is the last month rule for HSA 2024?

Here's the “Last Month” rule for HSA accounts, quoted directly from IRS Publication 969: “Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers).

Can HSA be used for dental?

Yes, you can use a health savings account (HSA) or flexible spending account (FSA) for dental expenses.

Can I reimburse myself from HSA for previous years?

Can I use my HSA money to reimburse myself for qualified medical expenses from last year or before? Yes. As long as you incurred your qualified medical expense after you established your HSA, you can reimburse yourself for those expenses using your HSA money any time.

What is the HSA limit for 2025?

The limit is $4,300 if you are single. The 2025 HSA contribution limit for families is $8,550. HSA users aged 55 and older can make an extra $1,000 to their HSAs.

Are HSA plans worth it?

One of the biggest advantages of an HSA is that it offers a triple tax advantage, which means: Contributions to an HSA are federally tax-deductible, reducing your taxable income. Depending on where you live, you may also get a break on state income taxes. Assets in an HSA can potentially grow federal tax-free.

What qualifies as a high-deductible health plan IRS?

An HDHP is health coverage with a: Higher annual deductible than typical health plans and. Maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that the taxpayer must pay for covered expenses. Out-of-pocket expenses include copayments and cost sharing but do not include premiums.