What Disqualifies You From Contributing to an HSA?

What disqualifies you from contributing to an HSA comes down to five tripwires: your health plan doesn’t meet the IRS definition of a High Deductible Health Plan, you have other coverage that pays medical expenses before your HDHP deductible, you’re enrolled in any part of Medicare, someone else can claim you as a dependent, or you’re a non-resident alien.¹ You have to clear all of them on the first day of a month to contribute for that month. Miss one, and the whole month is off the table.

Your Health Plan Isn’t a Qualifying HDHP

Eligibility starts with the insurance itself. You must be covered by a High Deductible Health Plan that meets specific IRS thresholds, and those thresholds change each year.²

For 2026, an HDHP must carry a minimum annual deductible of at least $1,700 for self-only coverage or $3,400 for family coverage. The plan’s total annual out-of-pocket costs (deductibles, copays, and coinsurance, not premiums) cannot exceed $8,500 for self-only coverage or $17,000 for family coverage.³ A deductible below the floor or an out-of-pocket cap above the ceiling knocks the plan out, regardless of what the insurer calls it.

First-dollar coverage is where plans quietly fail. An HDHP is allowed to pay for preventive care before you meet the deductible. If it pays for other services before the deductible, it may lose its qualifying status.¹ Confirming both the deductible and the out-of-pocket limit against the IRS numbers is on you.

Other Health Coverage That Pays Before Your Deductible

Even with a qualifying HDHP, you’re disqualified if you’re also covered by another plan that reimburses general medical expenses before your HDHP deductible is met. The IRS calls this “other health coverage,” and it’s defined broadly.²

General-Purpose FSAs and HRAs (Including Your Spouse’s)

A general-purpose Flexible Spending Account or Health Reimbursement Arrangement is the most common disqualifier because it pays medical bills before you touch your HDHP deductible. The rule reaches a spouse’s account too. If your spouse’s employer offers a general-purpose FSA or HRA that could reimburse your medical expenses, you can’t contribute to your own HSA.¹

Compatible alternatives exist. A limited-purpose FSA or HRA that only reimburses dental and vision costs is fine alongside an HSA.⁴ A post-deductible HRA that pays nothing until the HDHP deductible is satisfied works, and so does a suspended HRA that the employee elects to freeze.¹ Open enrollment is when to catch this. A spouse who picks a general-purpose FSA in November ends your HSA eligibility starting in January.

Coverage You Can Keep

Not every additional policy is a problem. The statute specifically allows accident insurance, disability insurance, dental coverage, vision coverage, long-term care insurance, telehealth, and workers’ compensation coverage alongside your HDHP.² Fixed-amount hospital indemnity plans and specified disease policies, like standalone cancer insurance, are also permissible. The question is always whether the second plan reimburses the same general medical expenses your HDHP covers.

Any Part of Medicare

Enrollment in any part of Medicare immediately ends your HSA eligibility. Part A, Part B, Part C, Part D: all of them disqualify you. Once you’re enrolled, neither you nor your employer should contribute.¹

Social Security is where this bites. When you apply for Social Security retirement benefits after age 65, you’re automatically enrolled in Medicare Part A, and that enrollment is retroactive for up to six months before the month you apply (though no earlier than the month you turned 65).⁵ Any HSA contributions you made during those retroactive months become excess contributions.

If you plan to keep funding your HSA past 65 while delaying Social Security, stop contributing at least six months before you apply. Pick your Social Security start date, count back six months, and make your last HSA deposit before that point. People who miss this window usually find out at tax time, after the penalties have already attached.

VA Care and TRICARE

Veterans face a split rule. VA care received for a service-connected disability has no effect on HSA eligibility; the statute protects it.² VA care for a condition that is not service-connected generally forces a three-month wait after the care before you can resume contributions.¹

TRICARE is a flat disqualifier. Because TRICARE isn’t an HDHP and provides general medical coverage, enrollment prevents HSA contributions even if you also carry a qualifying HDHP through a civilian employer.

You Can Be Claimed as Someone’s Dependent

If another person can claim you as a dependent on their tax return, you can’t contribute to an HSA. The word to notice is “can.” Whether they actually claim you is irrelevant; meeting the dependency tests for relationship, age, residency, and support is enough to disqualify you.²⁶

This catches young adults regularly. A 22-year-old college student with a qualifying HDHP through a part-time job might assume they can open an HSA. If their parents provide more than half their support, the student can be claimed and therefore can’t contribute. A parent with their own HDHP coverage could use their own HSA to pay the student’s medical expenses, but the student still can’t fund a personal account.

Non-Resident Alien Status

Non-resident aliens cannot contribute to an HSA. You have to qualify as a U.S. resident for tax purposes, which means meeting either the green card test or the substantial presence test. The restriction applies for any month in which you hold non-resident alien status. Foreign nationals on visas who haven’t yet crossed the substantial presence threshold should check their classification before enrolling in an employer HSA program.

The Last-Month Rule Testing Period

One disqualification works backward in time. The last-month rule lets you contribute the full annual amount if you’re an eligible individual on the first day of the last month of your tax year, usually December 1, even if you weren’t eligible for the earlier months.³

The cost is a testing period. Use the rule in December 2026, and you must remain an eligible individual through December 31, 2027. Lose eligibility during that stretch for any reason other than death or disability, and you owe income tax on the contributions above what your actual months of eligibility would have supported, plus a 10% additional tax on that amount.¹ The usual triggers are switching jobs and landing on a non-HDHP plan, enrolling in Medicare, or a spouse picking up a general-purpose FSA. If your coverage might shift the following year, contributing only the prorated monthly amount is the safer play.

What It Costs If You Contribute Anyway

Contributing while ineligible creates an excess contribution, and the IRS charges a 6% excise tax on the excess for every year it stays in the account. The penalty compounds annually until you fix it.⁷

You can avoid the excise tax by withdrawing the excess contributions plus any earnings they generated before your tax filing deadline, including extensions. A late withdrawal is also available up to six months after the original due date through an amended return. The withdrawn contributions aren’t deductible, and the earnings have to be reported as income for the year of withdrawal.⁸ HSA contributions, deductions, and distributions go on Form 8889; the 6% excise tax is calculated on Form 5329.⁹

1
Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
2
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
3
Internal Revenue Service. Rev. Proc. 2025-19 – 2026 Inflation Adjusted Amounts for Health Savings Accounts
4
FSAFEDS. Limited Expense Health Care FSA
5
Centers for Medicare & Medicaid Services. Original Medicare (Part A and B) Eligibility and Enrollment
6
Internal Revenue Service. Individuals Who Qualify for an HSA
7
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts
8
Internal Revenue Service. Instructions for Form 8889 (2025)
9
Internal Revenue Service. Instructions for Form 5329 (2025)