How to Open Your Own Health Savings Account

Yes, you can open an HSA on your own if you have the right insurance

You can open a Health Savings Account yourself without going through an employer, but only if you are covered by a high-deductible health plan (HDHP). The plan itself does not have to come from your employer — you can buy one on the individual market through your state's health insurance exchange or directly from an insurer. Once you have HDHP coverage, you can open an HSA at a bank, credit union, or investment firm that offers them.

The key requirement is the insurance plan, not where you work. If you are self-employed, retired, unemployed, or work for a small business that does not offer health benefits, you can still open an HSA as long as you enroll in an HDHP and meet the IRS rules for who can contribute.

Key Takeaways

• You must be enrolled in a high-deductible health plan to open an HSA; employer sponsorship is not required.
• You can buy an HDHP through your state's health insurance exchange, a private insurer, or Medicare Advantage if you are 65 or older.
• Once you have HDHP coverage, you can open an HSA at any bank, credit union, or brokerage that offers them — you do not need permission from your insurer.
• You must open the account and make contributions in the same calendar year you are covered by the HDHP, or by the tax filing deadline the following year.
• Self-employed people and those without employer coverage can contribute the full individual or family limit, depending on their plan type.

Finding and buying an HDHP on your own

If your employer does not offer health insurance, you will buy your HDHP through Healthcare.gov (or your state's exchange if it runs its own marketplace). During the annual open enrollment period — usually November through January — you can filter plans by deductible amount and see which ones may have access to as HDHPs. Outside open enrollment, you can enroll only if you have a may have access to life event, such as losing employer coverage, moving to a new state, or getting married.

The IRS sets the minimum deductible for an HDHP each year. For 2024, the minimum is $1,600 for individual coverage and $3,200 for family coverage. Plans sold as "HSA-may be able to access" on the exchange will meet these thresholds. You can also buy directly from an insurer's website if they sell individual plans in your state, though you will still need to enroll during open enrollment or with a may have access to event.

If you are 65 or older and enrolled in Medicare, you cannot use a traditional HDHP, but you may be able to open an HSA if you are covered by a Medicare Advantage plan that qualifies as an HDHP. Check with the plan directly about HSA may be able to access before enrolling.

Opening an HSA account after you have insurance

Once your HDHP coverage is active, you can open an HSA at any financial institution that offers them. Major banks like Chase, Bank of America, and Wells Fargo offer HSAs, as do credit unions and investment firms like Fidelity, Vanguard, and Charles Schwab. You do not need to use the same bank or insurer that provides your health plan.

To open an account, you will need your Social Security number, proof of HDHP coverage (your insurance card or a letter from your insurer showing the plan is HSA-may be able to access), and basic identifying information. Some providers let you open the account online in minutes; others may require a phone call or in-person visit. There is no fee to open an HSA, though some providers charge monthly maintenance fees or investment fees if you invest the money rather than keep it in a savings account.

You can open the account anytime during the year you are covered by the HDHP. If you open it after January 1, you can still contribute for the full year, but you must make that contribution by the tax filing deadline (usually April 15) of the following year. This is called a "catch-up contribution" and is allowed once per year.

Contribution limits when you are self-employed or uninsured

If you do not have employer coverage, your contribution limit depends on the type of HDHP you chose. For 2024, the limit is $4,150 for individual coverage or $8,300 for family coverage. If you are 55 or older, you can add an extra $1,000 per year (called a "catch-up contribution"). These limits change each year, and your HSA provider will tell you the current year's limit when you open the account.

You can contribute the full amount in a lump sum or spread it across the year in smaller deposits. If you enroll in an HDHP partway through the year, you can still contribute the full annual limit as long as you were covered by an HDHP for the last month of that year and the first month of the following year (this is called the "testing period" rule). If you do not meet this rule, you can only contribute a prorated amount.

Tax deductions and reporting your HSA contributions

When you contribute to an HSA on your own, you deduct the contribution on your federal tax return. If you are self-employed, you report the contribution on Schedule 1 (Form 1040) and can deduct it even if you do not itemize deductions. If you are an employee but your employer does not offer an HSA, you still report the contribution on Schedule 1.

Your HSA provider will send you a Form 5498-SA each year showing how much you contributed. Keep this form with your tax records. If you made contributions through payroll at a previous job and then opened your own HSA later in the year, you will receive multiple Forms 5498-SA — add them together to see your total contribution for the year.

What happens if you lose HDHP coverage

If you switch to a health plan that is not an HDHP — such as a PPO or HMO — you can no longer make new contributions to your HSA. However, you keep the account and the money already in it. You can continue to withdraw funds for may have access to medical expenses tax-free, even after you are no longer covered by an HDHP. The money does not expire.

If you switch back to an HDHP later, you can resume contributions. There is no limit to how many times you can switch between HDHP and non-HDHP coverage during your lifetime.

Common mistakes to avoid

The most common mistake is opening an HSA without confirming you have HDHP coverage. If you contribute to an HSA while covered by a non-may have access to plan, the IRS will tax the contribution and charge a 20% penalty. Before you open an account, call your insurer or check your insurance card to confirm the plan is HSA-may be able to access.

Another mistake is missing the contribution deadline. If you open an HSA in November or December, you have until April 15 of the following year to contribute for that year. After that date, you can only contribute for the current year going forward. Keep track of the deadline so you do not lose the tax deduction.

A third mistake is not keeping receipts for medical expenses. You do not have to submit receipts when you withdraw money, but the IRS can ask for them years later if you are audited. Keep receipts and records of all HSA withdrawals for at least three years after you file your tax return.

Frequently Asked Questions

Do I need my employer's permission to open an HSA?

No. If you have HDHP coverage — whether from an employer, the individual market, or Medicare Advantage — you can open an HSA at any financial institution without permission from your employer or insurer. Your employer cannot prevent you from opening an account, and your insurer does not need to approve it.

Can I open an HSA if I am on Medicare?

Traditional Medicare does not work with HSAs because it is not an HDHP. However, if you are enrolled in a Medicare Advantage plan that qualifies as an HDHP, you may be able to open or contribute to an HSA. Contact your Medicare Advantage plan directly to ask if it is HSA-may be able to access.

What if I buy insurance on the exchange but it is not an HDHP?

You cannot open an HSA. Only plans labeled as HSA-may be able to access on the exchange may have access to. If you want an HSA, filter your search results to show only HSA-may be able to access plans, or contact the insurer directly to ask which of their individual plans meet the HDHP requirements.

Can I open multiple HSAs?

No. You can have only one HSA at a time. If you open a second account, you will exceed the annual contribution limit and owe taxes and penalties on the excess. If you want to switch providers, you can transfer the balance from one HSA to another or roll it over, but you cannot maintain two active accounts simultaneously.

What if I open an HSA but then lose my HDHP coverage before the year ends?

You can keep the account and the money in it, but you cannot make additional contributions for that year once you lose HDHP coverage. You can still withdraw funds for may have access to medical expenses tax-free. If you re-enroll in an HDHP later, you can resume contributions.