HSAs: Who can participate and make contributions?

Health Savings Accounts (HSAs) are a smart option for employees and employers alike. Offering a triple tax advantage, there’s a reason these once hidden gems have skyrocketed in popularity. With an HSA, money goes in tax-free, savings grow tax-free, and withdrawals are tax-free if used for eligible items.

With more people taking advantage of these accounts, so comes the flood of questions from employees. Since their inception in the early 2000s, American Fidelity has helped employees across the country navigate their accounts.

Who can contribute to an HSA?

There are several requirements for contributing to an HSA. But above all, the first requirement is that the employee be covered by a qualified High Deductible Health Plan (HDHP). These qualifications are determined by the Internal Revenue Code (IRC) and can change each calendar year.

Things to Consider About a High Deductible Health Plan

Can an employee or spouse participate if enrolled in other health plans besides an HDHP?

Employees may not contribute to an HSA if they are also covered by other non-qualified health plans. However, a spouse and/or child(ren) can be enrolled in other coverage including Medicare.

If both spouses are HSA-eligible, can they have two accounts?

If both spouses are HSA-eligible:

Spouse can have separate HSA, if eligible. Contribution limits apply.
If they work for the same employer, two spouses may not both contribute to a single HSA via payroll deduction.
Spouse may open own HSA to take advantage of catch-up contributions (55 or older).

Can an employee have an HSA if claimed on another person’s tax return?

If an employee is being claimed as a dependent on another person’s tax return, neither the employee nor the employer may contribute to the employee’s HSA.

Can an employee be enrolled in Medicare and participate in an HSA?

No, employees may not contribute to an HSA if they are participating in Medicare or Tricare.

If the employee enrolls in Medicare mid-year, the HSA contribution limit is pro-rated. Medicare can make coverage retroactive six months, but no earlier than the first month the employee became eligible.

Can HSA contributions be made outside of payroll deduction?

HSA contributions can be made outside of payroll and deducted on Form 8889. Employees should be careful to not contribute more than the Internal Revenue Code limit.

2022 HSA Limits

Contribution	Amount
Contribution Max (Self)	$3,650 (up $50)
Contribution Max (Family)	$7,300 (up $100)
HDHP Min. Deductible (Self)	$1,400 (no change)
HDHP Min. Deductible (Family)	$2,800 (no change)
HDHP Max. Out-of-pocket (Self)	$7,050 (up $50)
HDHP Max. Out-of-pocket (Family)	$14,100 (up $100)

Can an employee participate in an HSA and Flexible Spending Account (FSA) concurrently?

Employees may not contribute to an HSA if they have a general-purpose Healthcare FSA or HRA. They may have a Limited Purpose FSA or HRA. It’s also important to be aware of the grace period on the Healthcare FSA.

American Fidelity helps our niche customers succeed in benefits management. We answer questions like the above and help employees understand their total benefits package so they can get the most out of the plans they select.

This blog is up to date as of May 2021 and has not been updated for changes in the law, administration or current events.