Who Qualifies for an HSA: HDHP Rules and 2026 Changes

You qualify for a Health Savings Account if four things are true at once: you’re covered by a qualifying high deductible health plan (HDHP), you carry no other health coverage that pays medical costs before that deductible is met, you aren’t enrolled in any part of Medicare, and no one else can claim you as a dependent on their tax return. New rules that took effect January 1, 2026 widened the door significantly, letting people on bronze and catastrophic marketplace plans and in direct primary care arrangements qualify for the first time. Getting any one of the four wrong triggers a 6% excise tax on every dollar you contributed while ineligible.

The High Deductible Health Plan Requirement

You must be covered by a qualifying HDHP on the first day of any month you want to contribute. For 2026, a plan qualifies if it meets these thresholds:

Self-only coverage: minimum annual deductible of $1,700 and a maximum out-of-pocket limit of $8,500.
Family coverage: minimum annual deductible of $3,400 and a maximum out-of-pocket limit of $17,000.

Those out-of-pocket caps include your deductible, copayments, and coinsurance, but not premiums. A plan that falls one dollar short on the minimum deductible or exceeds the out-of-pocket ceiling by any amount disqualifies you.¹ Whether you get the plan through an employer or the marketplace doesn’t matter; the numbers do. Keep your Summary of Benefits and Coverage handy so you can verify the deductible and out-of-pocket maximum at tax time.

What Changed for 2026

The One, Big, Beautiful Bill Act made three changes to eligibility that all took effect January 1, 2026.

Bronze and Catastrophic Marketplace Plans Now Count

Bronze-tier and catastrophic plans are treated as HDHPs for HSA purposes even if they don’t meet the standard deductible and out-of-pocket thresholds. Before the change, many bronze enrollees couldn’t contribute because their plan’s cost-sharing structure didn’t line up with the HDHP definition. The IRS has also clarified that a bronze-level plan bought off-exchange qualifies the same way one bought through a marketplace does.²

Direct Primary Care Arrangements Are Compatible

If you pay a monthly or periodic fee to a direct primary care practice for routine services, that arrangement no longer disqualifies you. You can carry both an HDHP and a DPC membership, and HSA funds can be used tax-free to pay DPC fees.²

Telehealth Before the Deductible Is Permanent

An HDHP can now cover telehealth visits before the deductible is met without jeopardizing your HSA eligibility. Congress had extended this on a temporary basis for years; the new law makes it permanent for plan years beginning on or after January 1, 2025.¹

Other Coverage That Disqualifies You

The IRS looks at every form of health coverage you carry beyond your HDHP. If any of it pays for medical expenses before you’ve met your HDHP deductible, you lose HSA eligibility. The common ways people trip this rule:

A spouse’s traditional (non-HDHP) employer plan that also covers you.
A general-purpose Flexible Spending Account, including one your spouse holds that can reimburse your expenses.
A general-purpose Health Reimbursement Arrangement that pays medical bills before the deductible is met.
TRICARE, which doesn’t function as an HDHP and generally rules out contributions for veterans and active-duty members receiving it.

The FSA and HRA issue is where most people get caught, because compatible versions exist. A limited-purpose FSA or HRA that only covers dental, vision, and preventive care is fine. So is a post-deductible FSA or HRA that doesn’t kick in until after you’ve met your HDHP’s minimum deductible. A suspended HRA, frozen before the plan year so it can’t reimburse anything except preventive care, also preserves eligibility. If your employer offers an FSA alongside an HDHP, check whether it’s limited-purpose before enrolling.³

Coverage That Won’t Disqualify You

The IRS specifically permits certain insurance alongside an HDHP. Dental, vision, long-term care, disability, and specific-disease or specific-illness coverage are all safe. Policies paying a fixed dollar amount per day of hospitalization are allowed. Workers’ compensation and accident insurance are fine too.³ None of these duplicate the broad medical coverage the HDHP provides, which is the reason they’re allowed.

Medicare Enrollment Ends Contributions

Once you enroll in any part of Medicare (Part A, B, C, or D), your HSA contribution limit drops to zero for every month you’re enrolled. You can still spend money already in the HSA tax-free on qualified medical expenses, but you can’t put new money in.³

Turning 65 doesn’t automatically end your eligibility. Being eligible for Medicare is different from being enrolled in it. If you’re still working at 65 with employer HDHP coverage and haven’t signed up, you can keep contributing. The trap is Social Security: if you start collecting Social Security retirement benefits at or after 65, you’re automatically enrolled in Medicare Part A.⁴

The Six-Month Retroactive Coverage Problem

When you apply for Medicare Part A after age 65, coverage is backdated up to six months (but not before your 65th birthday).⁴ Any HSA contributions made during those retroactive months become excess contributions, because the IRS treats you as having been enrolled in Medicare the whole time.

If you’re 65 or older and planning to enroll in Medicare soon, stop contributing at least six months before your enrollment date. If you’ve already contributed during the lookback window, contact your HSA administrator to withdraw the excess before you file your return. Otherwise you’ll face a 6% excise tax on those contributions for every year they sit in the account, and you may need to file an amended return.³

Dependents Cannot Contribute

If someone else can claim you as a dependent on their federal return, you cannot deduct contributions to an HSA. The rule comes from the HSA statute itself, which denies the deduction to anyone another taxpayer can claim as a dependent.⁵ Having your own HDHP through an employer doesn’t override this; dependency status controls.

This matters most for young adults. If you’re under 26 and on a parent’s health plan, you may still qualify as a dependent on their taxes. If so, you can’t contribute to your own HSA even when the parent’s plan is an HDHP. Once you’re no longer claimable as a dependent, because you provide more than half your own support for example, the restriction lifts and you can open an HSA if you meet the other requirements.

Mid-Year Eligibility and the Last-Month Rule

If you become eligible partway through the year, say you switch to an HDHP in July, your contribution limit is normally prorated to the months you were actually eligible. There’s an alternative: the last-month rule treats you as eligible for the entire year if you’re an eligible individual on December 1. That lets you contribute the full annual amount even with just a few months of HDHP coverage.³

The catch is a 13-month testing period. If you use the last-month rule, you must remain an eligible individual from December 1 through December 31 of the following year. If you drop your HDHP, pick up disqualifying coverage, or enroll in Medicare inside that window, the difference between what you contributed and what you were entitled to based on actual months of eligibility gets added back to taxable income, plus a 10% additional tax on that amount.⁶ Use the rule only if you’re confident you’ll keep qualifying through the end of the following year.

What Happens If You Contribute While Ineligible

The IRS enforces the eligibility rules with penalties that can stack. Contributions over your limit, or during months you weren’t eligible, are excess contributions subject to a 6% excise tax every year they remain in the account. You report and pay this on Form 5329. Withdraw the excess plus any earnings on it before your tax filing deadline (including extensions), and the IRS treats the contribution as if it never happened. Miss the deadline and the 6% keeps compounding annually until you pull the money out or apply it against a future year’s limit.³

Separately, if you withdraw HSA funds for anything other than a qualified medical expense, that amount is added to your taxable income and hit with an additional 20% tax. Once you turn 65, become disabled, or die, the 20% penalty goes away, though regular income tax still applies to non-medical withdrawals.³

1
Internal Revenue Service. Notice 2026-05 – Expanded Availability of Health Savings Accounts
2
Internal Revenue Service. Treasury, IRS Provide Guidance on New Tax Benefits for Health Savings Account Participants Under the One, Big, Beautiful Bill
3
Internal Revenue Service. Publication 969 (2025) – Health Savings Accounts and Other Tax-Favored Health Plans
4
Social Security Administration. When to Sign Up for Medicare
5
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
6
Internal Revenue Service. 2025 Instructions for Form 8889