To get a health savings account (HSA), you need to be enrolled in a high-deductible health plan (HDHP), then open the account through a bank, credit union, or HSA provider of your choice. The whole process can take as little as 15 minutes online once you have the right health insurance in place. Here’s how each step works.
Make Sure You Qualify
The biggest requirement for opening an HSA isn’t paperwork or a minimum deposit. It’s your health insurance. You must be covered by a high-deductible health plan, which is a specific type of health insurance with a higher annual deductible and lower premiums than a traditional plan. For 2026, the IRS defines an HDHP as a plan with an annual deductible of at least $1,700 for self-only coverage or $3,400 for family coverage. The plan’s out-of-pocket maximum also can’t exceed $8,500 for an individual or $17,000 for a family.
Beyond the insurance requirement, you also need to meet a few other criteria. You can’t be enrolled in Medicare. You can’t be claimed as a dependent on someone else’s tax return. And you can’t have other health coverage that isn’t an HDHP, with narrow exceptions for dental, vision, and certain supplemental plans. If you’re unsure whether your current plan qualifies, check your plan documents or call your insurer. Most HDHP-eligible plans are clearly labeled as “HSA-compatible” or “HSA-eligible” during enrollment.
Choose Where to Open Your HSA
If your employer offers an HSA through a specific provider, that’s often the simplest route, especially if your company makes contributions on your behalf or deducts your contributions from your paycheck pre-tax. But you’re never locked in. You can open an HSA on your own at any bank, credit union, or dedicated HSA provider, and you can transfer funds between providers if you want to switch later.
The differences between providers come down to fees, investment options, and ease of use. Fidelity is a popular choice because it charges no account management fees, has no minimum balance to start investing, and offers a wide range of investment funds. Lively charges a $24 annual account management fee for individual accounts but is well regarded for its clean interface and investment integration. HealthEquity is one of the largest HSA administrators, often used by employers, though it charges fees for things like account closure ($25) and excess contribution refunds ($20).
If you plan to use your HSA purely for near-term medical expenses, fees and debit card access matter most. If you want to invest your HSA balance for the long term (which is one of the account’s most powerful features), look for a provider with low-cost index fund options and no minimum investment threshold.
Open the Account
Opening an HSA is similar to opening a bank account. Most providers let you apply entirely online. You’ll typically need a photo ID, your Social Security number, and proof that you’re enrolled in an HDHP. Some providers verify your insurance eligibility automatically, while others ask you to self-certify that you have qualifying coverage. You’re responsible for accuracy either way, since the IRS holds you accountable for eligibility, not the bank.
Once your application is approved, you’ll receive account details and can begin funding the account immediately. Many providers also send a debit card linked to your HSA so you can pay for medical expenses directly.
Fund Your Account
For 2026, the IRS allows you to contribute up to $4,400 if you have self-only HDHP coverage, or $8,750 for family coverage. If you’re 55 or older, you can add an extra $1,000 on top of those limits as a catch-up contribution. These limits apply to the total from all sources: your contributions, your employer’s contributions, and anyone else who puts money in on your behalf.
You have several ways to fund the account. If your employer offers payroll deductions into your HSA, that’s the most tax-efficient method because the money comes out before federal income tax and FICA taxes (Social Security and Medicare) are calculated. If you contribute on your own through a bank transfer or check, you’ll still get a federal income tax deduction when you file, but you won’t avoid the FICA taxes.
You don’t have to contribute the full annual limit, and you don’t have to fund it all at once. Many people set up automatic monthly transfers to spread contributions throughout the year. You have until the tax filing deadline (typically April 15 of the following year) to make contributions that count toward a given tax year.
How to Use Your HSA
HSA funds can pay for a wide range of qualified medical expenses: doctor visits, prescriptions, dental work, vision care, mental health services, and even some over-the-counter medications and supplies. You can pay using your HSA debit card at the point of sale, reimburse yourself after paying out of pocket, or pay providers directly through your HSA’s online portal.
If you withdraw money for something that isn’t a qualified medical expense before age 65, you’ll owe income tax on the amount plus a 20% penalty. After 65, non-medical withdrawals are taxed as ordinary income but carry no penalty, making the account function similarly to a traditional retirement account at that point.
Why an HSA Is Worth the Effort
An HSA offers a triple tax advantage that no other account type matches. Contributions reduce your taxable income. The money grows tax-free through interest or investments. And withdrawals for qualified medical expenses are completely tax-free. Unlike a flexible spending account (FSA), your HSA balance rolls over every year with no “use it or lose it” deadline, and the account stays with you if you change jobs or retire.
Many people treat their HSA as a long-term investment vehicle, paying current medical bills out of pocket and letting the HSA balance grow for decades. There’s no requirement to spend HSA money in the same year you incur a medical expense. You can pay out of pocket today, save the receipt, and reimburse yourself from your HSA years later, giving your investments more time to compound.