To qualify for a tax-exempt Health Savings Account (HSA), you must be enrolled in which type of plan?

• A. Traditional PPO
• B. High Deductible Health Plan
• C. Health maintenance organization
• D. Catastrophic plan

Answer: (B)

Eligibility for a Health Savings Account hinges on being enrolled in a High Deductible Health Plan. HSAs are designed to pair with HDHPs because the plan structure requires you to pay more out of pocket before coverage starts, while the HSA provides a tax-advantaged way to save for those costs. HDHPs have higher deductibles and out-of-pocket limits than typical plans, which is the key criterion for HSA eligibility. Traditional PPOs and HMOs generally do not meet the HDHP requirements, so they don’t qualify for HSA contributions. A catastrophic plan is typically aligned with HDHP criteria and can be HSA-eligible in many cases, but the standard answer here is a High Deductible Health Plan.