To be eligible to contribute to an HSA, you must meet the following conditions:

1. High-Deductible Health Plan (HDHP) Coverage: You must be enrolled in an HDHP. For 2024, the IRS defines an HDHP as having a deductible of at least $1,600 for individual coverage or $3,200 for family coverage.
2. No Other Health Coverage: You cannot have other health coverage that is not an HDHP. Certain types of insurance like dental, vision, and long-term care are permitted however.
3. No Medicare Enrollment: You cannot be enrolled in Medicare and contribute to the HSA

Once you're sure you are eligible, use this account strategically!

1. Maximize Contributions: For 2024, the contribution limits are $4,150 for individuals and $8,300 for families.  Even if you make $10M per year, these are tax deductible!
2. Understand Qualified Medical Expenses: HSAs can be used tax-free for qualified medical expenses, including deductibles, copayments, and other healthcare expenses not covered by insurance.  For a full list of HSA eligible expenses (there are HUNDREDS) see here.
3. Consider Investment Options vs sitting in Cash: Many HSAs offer investment options. Investing part of your HSA funds can increase your account's growth potential, especially if you don't need to use the funds for immediate medical expenses. 
   
   
   1. Market Investing
   2. Self Directing- you can even self direct your HSA just like you could self direct an IRA.  At Anomaly, we have used this strategy:
      1. Build up HSA account (to $30-$40k)
      2. Create a Partnership with your HSA 
      3. HSA Brings "cash to the table"
      4. The Partnership buys rental property
         1. Special allocation of depreciation to YOU as an individual

There is NO requirement to reimburse yourself in the same tax year.  In fact, we LOVE this strategy, if possible:

• Build up your HSA year after year
• Invest the dollars, growing tax free
• Towards retirements, reimburse yourself for ALL qualified medical expenses incurred over the past decades!  So long as you keep an accurate listing of medical expenses, you can absolutely reimburse yourself years later, keeping the cash invested in the meantime.

There are emerging companies that partner with certain fitness brands to qualify certain exercise under HSA plans.  One such example is TrueMed.  TrueMed allows for HSA dollars to be used towards Crossfit and other such exercise programs, after you undergo a virtual medical evaluation.  

This is a new area of HSAs which is NOT tested in Tax Court nor has the IRS come out with an opinion on it at this time.   However, in some cases, medical necessary exercise can be a qualified expense!

Questions on HSAs?  Drop a note to your Project Manager in Soraban!