LEARNING OBJECTIVES

• Understand what makes a health plan HSA-eligible
• Explain how a High Deductible Health Plan (HDHP) works
• Compare HDHPs with other common plan types (PPOs, HMOs) and understand their ineligibility

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LESSON

Before diving into the plan details, it's important to know if you can even open an HSA.

To qualify:

• You must be enrolled in a High Deductible Health Plan (HDHP)
• You cannot be claimed as a dependent on someone else’s tax return, meaning you must be tax-independent

HDHPs can have different network setups; some are more flexible or more limited. The key thing is that the health plan meets the high-deductible requirement.

Note: You can be on your own insurance plan or on a guardian’s plan, as long as the plan is an HDHP and you meet the other criteria.

What is a High Deductible Health Plan (HDHP)?

An HDHP is a type of health insurance with:

• Higher deductibles: You pay more out-of-pocket before insurance starts covering costs
• Lower monthly premiums: You pay less each month

So, Why Does This Matter?

HDHPs are the only type of plan that allows you to open an HSA.

Common insurance plans that do not qualify for an HSA:

• Preferred Provider Organization (PPO): Flexible networks, allows out-of-network care, usually lower deductibles → Ineligible
• Health Maintenance Organization (HMO): Limited network, referrals required, usually lower deductibles → Ineligible

Key takeaway: Only HDHPs let you open and contribute to an HSA. Knowing the differences helps you make smart decisions when choosing a plan.