Key takeaways:
You can contribute money to a health savings account (HSA) if you have a qualifying health plan and meet other IRS requirements.
For 2025, your health plan must have an annual deductible of at least $1,650, and your annual out-of-pocket expenses can’t exceed $8,300 for individual coverage.
If you are enrolled in Medicare, you cannot contribute to an HSA. But you can still use any remaining funds in your account to pay for eligible medical expenses.
Check to see if you are HSA-eligible every month to avoid any surprise taxes or penalties later on. If you contribute money and don’t meet the requirements, you will have excess contributions.
A health savings account, or HSA, is a tax-advantaged account that allows individuals and families to pay for qualified medical expenses not covered by insurance.
You might already know that you must have a qualifying high-deductible health plan (HDHP) to contribute to an HSA. But there are other requirements that you may not be aware of. It is important to review these rules before depositing money into an HSA to avoid taxes and penalties.
What are the eligibility requirements for a health savings account (HSA)?
Contributing money to an HSA allows you to take advantage of three main tax benefits:
Pretax contributions
Tax-free growth
Tax-free withdrawals
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While HSAs offer these appealing tax benefits, not everyone qualifies to contribute. Below are four IRS requirements you need to meet each year before you contribute to an HSA. You must:
1. Be covered under an HSA-eligible health plan
You generally must be covered under a qualified HDHP on the first day of the month in which you contribute to an HSA. So, if you enroll in an HDHP on June 15, you won’t be able to contribute to an HSA until July 1.
It’s also important to check your HDHP’s minimum deductible and maximum out-of-pocket thresholds to ensure your plan is HSA-eligible. For 2025, your health plan must have an annual deductible of at least $1,650, and your annual out-of-pocket expenses can’t exceed $8,300 for individual coverage. If you have family coverage, your health plan must have a deductible of at least $3,300, and your maximum out-of-pocket expenses can’t be more than $16,600.
High-deductible health plan requirements | 2025 |
|---|---|
Minimum deductible for an individual | $1,650 |
Minimum deductible for a family | $3,300 |
Maximum out-of-pocket expenses for an individual | $8,300 |
Maximum out-of-pocket expenses for a family | $16,600 |
HDHPs have lower monthly premiums but higher deductibles than traditional insurance plans. So you’ll have to pay more money up front for qualified medical expenses before your insurance company starts sharing the cost.
Your HDHP may provide preventive care benefits before you reach your deductible. These can include coverage for:
Child and adult immunizations
Routine prenatal care
Screening services for conditions such as cancer and heart disease
How does a health savings account (HSA) work? Find out how contributing to an HSA can help you save on healthcare costs today and during retirement.
Qualified medical expenses: You might be surprised to learn that you can use your HSA to pay for these qualified medical expenses.
Can you use your HSA to pay for lip balm? Lip balm is typically HSA-eligible if it meets certain requirements, but here’s what you should know.
Starting January 1, 2026, eligibility rules will expand. Under the One Big Beautiful Bill Act (OBBBA), HSA-eligible health plans will include not only traditional HDHPs but also certain Affordable Care Act (ACA, also known as Obamacare) bronze and catastrophic plans. This change means more people will be able to take advantage of HSAs without needing to enroll in a traditional HDHP.
2. Not be enrolled in Medicare
Medicare is a federal health insurance plan for people ages 65 and older and for younger people with certain medical conditions. When you enroll in Medicare, you give up the right to contribute to an HSA. An HSA is not compatible with Medicare.
Although you can’t contribute to an HSA when you become a Medicare beneficiary, you can still use any remaining funds in your account to pay for qualified medical expenses. You can even pay for Medicare-related expenses, including premiums for:
Medicare Part A (hospital insurance)
Medicare Part B (medical insurance)
Medicare Part D (prescription medication insurance)
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3. Not be claimed as a dependent on someone else’s tax return
You are not allowed to contribute money to an HSA if another person claims you as a dependent on their tax return. According to the IRS, someone can claim you as a dependent if you are considered a qualifying child or qualifying relative.
4. Not have health coverage outside of IRS-approved coverage
If you and your spouse have HDHP coverage, you generally are not allowed to have other health coverage. But there are a few exceptions to this rule. If you have an HDHP, you are allowed to have additional insurance that provides benefits for:
A specific medical condition or illness
A fixed amount for hospitalization (per day, month, or other period)
Liabilities related to workers’ compensation laws
Other types of coverage that won’t disqualify you from contributing to an HSA include:
Disability
Telehealth
What are the HSA contribution limits for this year?
The IRS sets contribution limits for individual and family HSAs every year. Your maximum contribution limit will depend on the following:
Type of HDHP coverage you have
Your age
Date you became HSA-eligible
Date you became ineligible to make HSA contributions, if applicable
For example, the maximum amount you can contribute to a family HSA in 2025 is $8,550 if you are under age 55. And the maximum amount you can contribute to an individual HSA is $4,300. But if you are age 55 or older, you can contribute an additional $1,000 to your account. This is known as a “catch-up contribution.”
The below table shows the standard HSA contribution limits for 2025 and 2026.
Coverage | 2025 HSA contribution limits | 2026 HSA contribution limits |
|---|---|---|
Self | $4,300 | $4,400 |
Family | $8,550 | $8,750 |
Typically, you can only contribute the maximum amount to an HSA if you have a qualifying HDHP for the entire year. That means, for example, that if you were HSA-eligible for 6 months of the year, you would have to do a pro rata calculation to determine your maximum allowable contribution. To do so, divide the contribution limit for the year by 12 and multiply that number by the number of months you were HSA-eligible.
But the last-month rule provides an exception. If you are HSA-eligible on the first day of the last month of the coverage year — typically December 1 — you are considered eligible for the entire year, as long as you maintain eligibility for the entire subsequent year.
Who can contribute to an HSA?
Both individuals and employers can contribute to an HSA. However, the following rules apply:
Individuals: If you’re eligible to contribute to an HSA, you can make contributions up to the IRS’ annual limits. You have until the federal tax filing deadline (typically April 15) to make contributions for the prior tax year. For example, if you want to make contributions for 2025, you have until April 15, 2026, to do so.
Family members: A family member can contribute to an HSA on behalf of an eligible individual. Contributions made by family members count toward the annual limit.
Employers: Employers can contribute to your HSA, but the combined total of employer and employee contributions cannot exceed the annual limits. If your employer contributed $500 to your HSA in 2025 and you qualify to contribute up to the annual limit of $4,300 as an individual, your contribution is capped at $3,800 for the year.
You can contribute money to an HSA through your employer or on your own. If you contribute money through your employer as part of a Section 125 plan, your contributions are made with pretax dollars. You are not allowed to deduct the contributions on your tax return, because the funds were never taxed. They were made through a payroll deduction.
If you don’t have access to an HSA through work, you can open an account on your own. In this case, you don’t contribute money to the account with pretax dollars, so you can take a tax deduction when you file your return.
How to contribute to an HSA
If you have a job and are not self-employed, you can ask if your employer offers HSAs as part of its workplace wellness incentives. Your employer may even contribute money to your HSA to help you pay for out-of-pocket medical expenses.
If you are self-employed or don’t have access to an HSA through work, you can open an account on your own at the following locations:
Bank
Brokerage
Credit union
Other qualified financial institution
Can you put too much money in your HSA?
Yes, there can be a tax penalty for overcontributing to your HSA. It’s important to review the annual contribution limits to determine how much money you can put in your HSA. If you contribute too much money, you will have excess contributions.
For example, if you have an individual HSA account in 2025 and you contribute $5,000, you will have excess contributions since the annual limit is $4,300. You will need to withdraw the excess contributions before the tax filing deadline. If you fail to do so, you may have to pay an excise tax.
How can you use your HSA contributions?
You can use your HSA funds to pay for qualified medical and dental expenses, including:
Aspirin and other over-the-counter pain relievers
Band-Aids
Breathing strips
Certain types of lip balm
Nasal spray
Orthodontist visit
Period panties
Sleep aid
Thermometer
The following items are typically not HSA-eligible expenses:
Teeth-whitening
Toothpaste
Dental floss
Keep in mind that gym memberships are usually not HSA-eligible unless they are prescribed by a healthcare professional to treat a specific medical condition, such as obesity or heart disease, or as part of a rehabilitation plan such as physical therapy. In those cases, you may need a letter of medical necessity from your healthcare professional.
You can also invest the funds in your account and take advantage of tax-free growth. Depending on where your HSA account is held, you may be able to invest in:
Stocks
Bonds
Mutual funds
Alternative assets
Check with your HSA custodian to find out if you need a minimum balance in your account before you can invest the funds.
Frequently asked questions
You can contribute to an HSA until the tax filing deadline for that year, which is typically April 15 of the following year. For example, you can make 2025 HSA contributions until April 15, 2026. Contributions made by the deadline can be counted toward the prior tax year’s limit as long as you designate them for that year.
You will be penalized for withdrawing from your HSA if you use the funds for nonqualified expenses before age 65. In that case, the withdrawal is subject to income tax plus a 20% penalty. After you turn 65, the penalty no longer applies. However, you will still owe regular income tax on withdrawals for nonqualified expenses. Qualified medical expense withdrawals are always tax-free at any age.
Yes, HSA contributions are tax-deductible if you contribute to the account with after-tax dollars. For example, if you contribute to your HSA through payroll deductions, these are considered pretax and are not tax-deductible on your tax return. But if you contribute to your HSA on your own, you are using money that has already been taxed, so you can deduct the contribution on your tax return.
You can contribute to an HSA until the tax filing deadline for that year, which is typically April 15 of the following year. For example, you can make 2025 HSA contributions until April 15, 2026. Contributions made by the deadline can be counted toward the prior tax year’s limit as long as you designate them for that year.
You will be penalized for withdrawing from your HSA if you use the funds for nonqualified expenses before age 65. In that case, the withdrawal is subject to income tax plus a 20% penalty. After you turn 65, the penalty no longer applies. However, you will still owe regular income tax on withdrawals for nonqualified expenses. Qualified medical expense withdrawals are always tax-free at any age.
Yes, HSA contributions are tax-deductible if you contribute to the account with after-tax dollars. For example, if you contribute to your HSA through payroll deductions, these are considered pretax and are not tax-deductible on your tax return. But if you contribute to your HSA on your own, you are using money that has already been taxed, so you can deduct the contribution on your tax return.
The bottom line
Health savings accounts (HSAs) come with rules about when and how much you can contribute. Contributing too much money to an HSA, or contributing when you’re not eligible, can lead to unexpected taxes and penalties later on. So it’s important to be familiar with the requirements, which include having an HSA-eligible health plan.
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References
Healthcare.gov. (n.d.). High deductible health plan (HDHP).
Internal Revenue Service. (2024). Publication 501 (2024), dependents, standard deduction, and filing information.
Internal Revenue Service. (2024). Publication 969 (2024), health savings accounts and other tax-favored health plans.
Internal Revenue Service. (2025). Frequently asked questions about medical expenses related to nutrition, wellness and general health.
