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There are two basic criteria to check if your health insurance qualifies for HSA contributions. (There are details on the IRS website.)

  1. Minimum annual deductible (single person): $1,500
  2. Maximum annual deductible and other out-of-pocket expenses (single person): $7,500

Question 1: I don't understand the second criterium. Can you help?

Question 2: My insurance has an "Individual in-network medical out-of-pocket" of $7,900. Does it meet the second requirement?

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In order for your health plan to be considered an HSA-eligible HDHP, it needs to have a deductible that is more than the minimum deductible listed, and the out-of-pocket maximum can be no more than the maximum listed. As you noted, those values for 2023 are $1500 and $7500. Because your plan has an out-of-pocket maximum of $7900, it is not an HSA-eligible HDHP.

Even if your out-of-pocket maximum fell within the limits, there are some very specific requirements that a plan must meet in order to be HSA compatible, and these are not always obvious by looking at the numbers in the plan documents. If you aren’t sure, you can ask your health insurance company, and they should be able to tell you whether or not it is HSA compatible. Usually, HSA compatible plans will have the letters “HSA” or “HDHP” right in the name of the plan.

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  • thank you clear. The out of pocket crtierium of the IRS doesn't quite make sence to me: I would expect an HSA to be more helpful for an indiviual who has an health insurance with a High max out of pocket, the higher, the more beneficial, so the IRS criterium should set a minimum value for the health insurance "maximum out of pocket". Can you help me to understand the rationale behond this criterium?
    – Fuzzy
    Commented Aug 28, 2023 at 16:51
  • @Fuzzy See “Why do HSA qualifying plans have a max deductible?”.
    – Ben Miller
    Commented Aug 28, 2023 at 17:11
  • thank you Ben, clear. short answer: the second criterium (out of pocket) guarantees the premium is not too low. Your explanation in the link provided is very clear.
    – Fuzzy
    Commented Aug 28, 2023 at 17:40

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