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How to Open an HSA Account in 5 Steps

By Cassandra Finch · Education and Health Savings Writer

Open an HSA through your employer's plan or a bank that offers them

You open an HSA in one of two ways: through your employer if they offer one, or by opening an account directly with a bank, credit union, or investment firm that administers HSAs. Most people use their employer's plan because the setup is simpler — your employer handles the paperwork and may contribute money to your account. If your employer does not offer an HSA, or if you are self-employed, you can open one independently at a financial institution.

Before you open an account, confirm you have a high-deductible health plan (HDHP). An HSA only works if your health insurance meets the IRS definition of an HDHP — which means a higher deductible and lower premiums than a standard plan. If you are unsure whether your plan qualifies, check your insurance documents or call your health plan's customer service line.

Key Takeaways

  • You must be enrolled in an HDHP to open an HSA; verify your health plan meets IRS requirements before you start.
  • Employer-sponsored HSAs are the easiest route because your employer handles setup and may contribute funds on your behalf.
  • If your employer does not offer an HSA, you can open one directly at a bank, credit union, or investment firm that administers them.
  • You will need your Social Security number, proof of HDHP coverage, and basic personal information to complete the account opening process.
  • Contributions are limited each year; for 2024, the limit is $4,150 for individual coverage and $8,300 for family coverage, though these amounts change annually.

Step 1: Confirm your health plan is an HDHP

Check your health insurance documents or log into your insurance provider's website to find your deductible amount. For 2024, an HDHP must have a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. Your plan should also have an out-of-pocket maximum — the most you will pay in a year for covered services — of no more than $4,000 for individual coverage or $8,000 for family coverage.

If you are not sure whether your plan qualifies, call your health insurance company directly. They can confirm in a few minutes whether your plan is HSA-may be able to access. Do not assume a plan is an HDHP based on the name or premium cost alone; the IRS has specific rules, and your insurer can tell you whether your plan meets them.

Step 2: Choose where to open your account

If your employer offers an HSA, you will receive information about it during open enrollment or when you enroll in your HDHP. Your employer will name the bank or administrator they use — common ones include Fidelity, HealthEquity, Lively, and Optum Bank. You do not have a choice of administrator if you go through your employer, but that is usually fine because the setup is handled for you.

If your employer does not offer an HSA, search for "HSA accounts" at major banks, credit unions, and investment firms in your area. Compare account fees (some charge monthly maintenance fees, others do not), investment options if you plan to invest the money rather than just spend it, and whether they offer a debit card for easy access to your funds. The IRS maintains a list of approved HSA trustees and custodians on its website, though you do not need to consult it — any bank offering an HSA is already approved.

Step 3: Gather your documents and information

You will need your Social Security number, date of birth, and current address. You will also need proof that you are enrolled in an HDHP. This is usually your insurance card, a letter from your employer's benefits department, or a screenshot from your insurance provider's website showing your plan name and deductible. Have this ready before you start the application.

If you are opening an account through your employer, your employer's benefits team will often collect this information for you. If you are opening an account independently, the bank or administrator will ask you to provide it during the online application or over the phone.

Step 4: Complete the account application

For employer-sponsored HSAs, your employer will send you a link or form to complete. You will enter your personal information, confirm your HDHP coverage, and choose whether you want the account to be used for individual coverage only or family coverage. This choice matters because contribution limits are different for each, and you cannot change it mid-year.

If you are opening an account independently, go to the bank or administrator's website and look for "Open an HSA" or "New HSA Account". The application is usually online and takes 10 to 15 minutes. You will enter your personal information, upload or provide proof of HDHP coverage, and choose your coverage type. Some banks may ask you to verify your identity by uploading a photo of your driver's license or passport.

Step 5: Set up contributions and choose how to invest

Once your account is open, you can start contributing. If you have an employer-sponsored HSA, your employer may automatically deduct contributions from your paycheck — this is the most common setup. If you are contributing on your own, you can set up automatic monthly transfers from your bank account, or make one-time contributions.

You will also choose how to use the money in your account. Most HSAs offer a savings option (money sits in a cash account earning minimal interest) and an investment option (you can invest in mutual funds or stocks, similar to a 401(k)). If you are young and do not plan to use the money soon, investing may grow your balance faster. If you plan to use it for medical expenses this year, keep it in savings. You can change this choice later.

What happens after your account opens

Your account should be active within a few business days to a week. You will receive a debit card or checkbook to pay for medical expenses directly from your HSA, though you can also reimburse yourself from a personal account if you prefer. Keep receipts for all medical expenses you pay with HSA money — the IRS does not require you to submit them, but you must be able to prove the money went to may have access to medical expenses if you are ever audited.

You can contribute to your HSA from January 1 through December 31 each year. The IRS sets annual contribution limits, which change each year. For 2024, you can contribute up to $4,150 if you have individual coverage or $8,300 if you have family coverage. If you are 55 or older, you can contribute an additional $1,000 per year (called a catch-up contribution). Your employer or HSA administrator will tell you the current year's limits when you open your account.

Frequently Asked Questions

Can I open an HSA if I am self-employed?

Yes. You must have an HDHP, which you can purchase through the individual insurance market or through a professional association or trade group that offers health plans. Once you have the HDHP, you can open an HSA at any bank or administrator that offers them. You will contribute the money yourself rather than through payroll deduction.

What if I miss the deadline to open an HSA?

There is no deadline to open an HSA — you can open one at any time during the year as long as you are enrolled in an HDHP. However, if you want to make contributions for the current tax year, you must open the account and make contributions by December 31. You can also make contributions for the prior year until April 15 of the following year (the tax filing deadline).

Do I have to use the HSA my employer offers, or can I open my own?

You can only have one HSA at a time. If your employer offers one, you should use it because your employer may contribute money to it. If you open a separate HSA elsewhere, you must close one of them. If your employer does not offer an HSA, you can open one independently.

What if my employer changes HSA administrators?

Your employer can switch administrators, but you do not lose your money. When they switch, your balance transfers to the new administrator's system. You may need to update your login information or relink your bank account for transfers, but the process is handled by your employer and the two administrators.

Can I open an HSA if I am on Medicare?

No. Once you enroll in Medicare, you are no longer allowed to contribute to an HSA. However, if you already have an HSA, you can keep it and use the money for may have access to medical expenses, including Medicare premiums and out-of-pocket costs. You just cannot add new money to it.