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Can I Open a Health Savings Account On My Own?

3 min read

30 sec brief

Opening an HSA unlocks triple-tax savings. From there, you can save, spend or invest your HSA, as it fits your lifestyle and needs. No matter if you are an individual, family, self-employed or company owner, you can open an HSA. We will show you the requirements to open an HSA.

Opening an HSA unlocks triple-tax savings. From there, you can save, spend or invest your HSA, as it fits your lifestyle and needs. No matter if you are an individual, family, self-employed or company owner, you can open an HSA. We will show you the requirements to open an HSA.

Individual HSA

Any individual with a qualifying High Deductible Health Plan can open an HSA account and contribute either to the individual or family limit. HSA eligibility is not connected to your employment, but rather your health insurance plan.

HSA accounts are lifetime accounts that go with you from job to job. In 2019, individuals can contribute up to $3,500 and families can contribute up to $7,000. HSA contributions are not limited by income level or tax brackets.

HSA Contribution Requirements for Individuals or Families

  1. In 2018, HSA-eligible health insurance must have an annual minimum deductible of $1,350 for individuals and $2,700 for families.
  2. In 2018, the annual out-of-pocket maximum can’t be more than $6,750 for individuals and $13,300 for families.

These are the contribution requirements but are not tied to HSA spending or investing. HSA-eligibility is only tied to how much you can contribute into your HSA account. Once you have HSA funds in your account, you can use those funds for qualified out-of-pocket medical expenses or save for retirement, regardless of your HSA-eligibility status. So in other words, if you have HSA funds in your account and then switch to a different health insurance (a non-HDHP), you can still use your HSA funds towards your qualified medical expenses and yes, they are still tax-free!

Individual HSA Tips

  • Add $1 to your HSA on Day 1 – Penny fund your HSA so it is considered “established”. From there you can backdate any expenses to that date, even if you add the funds later. It’s a great HSA benefit!
  • Invest your HSA Funds – Save for tomorrow by investing your HSA funds. Under IRS regulations you can invest in a variety of investment options, including individual stocks, bonds, CDs, ETFs, or mutual funds.
  • Save for Retirement – Add flexibility and savings to a retirement plan and any existing retirement accounts like an IRA or 401(k), by adding an HSA. After 65 years of age, you can use an HSA just like a 401k or IRA for non-qualified medical expenses.

If you need help understanding how much money you can contribute to your HSA, we built a free HSA eligibility calculator. Individuals or families can open a health saving account to save tax-free dollars for medical expenses for today, tomorrow or years to come.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

About the author

Lively

We are HSA Experts! Lively is a Health Savings Account (HSA) platform for employers and individuals. A 401(k) for healthcare.

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