This site is an independent educational resource. We are not a tax advisor, financial advisor, insurance broker, HSA administrator, or HRA administrator. Contribution limits and eligibility rules are sourced from IRS Publication 969, IRS Revenue Procedure 2025-19, IRS Notice 2026-05, and Healthcare.gov. Verified April 2026. Nothing here is personalised tax, financial, or medical advice. Consult a qualified tax professional or licensed insurance agent before making decisions about your health benefits.

HSA vs HRA

Updated April 2026

HSA and HRA Eligibility in 2026: the rules that decide for you

Eligibility is binary, not discretionary. The IRS rules determine which accounts you can use. Here is every rule, in plain English, with the 2026 numbers and the edge cases that catch people off guard.

HSA eligibility checklist (all six must be true)

1

Covered by an HDHP

For 2026, an HDHP must have a minimum deductible of $1,700 (self-only) or $3,400 (family) and a maximum out-of-pocket of $8,500 (self-only) or $17,000 (family), per IRS Rev. Proc. 2025-19. Starting in 2026, all ACA Bronze and Catastrophic marketplace plans qualify regardless of whether they hit these exact thresholds.

IRS Rev. Proc. 2025-19; IRS Notice 2026-05

2

Not enrolled in Medicare

Enrollment in any part of Medicare (Part A, B, C, or D) ends your ability to contribute to an HSA for that month and all subsequent months. Medicare Part A enrollment can be retroactive by up to six months when you file for Social Security - a common trap for people delaying Social Security past 65.

IRS Pub 969, p. 4

3

Not claimed as a tax dependent

If someone else can claim you as a dependent on their tax return (even if they don't), you cannot contribute to an HSA. This applies to adult children under 26 who are on a parent's HDHP but are not the parent's tax dependent.

IRS Pub 969, p. 5

4

No disqualifying coverage

The following disqualify HSA contributions: a general-purpose FSA or HRA that covers medical expenses from day one, TRICARE (most types), VA medical benefits for the past three months (unless for a service-connected disability), Medicare, or any non-HDHP health plan. Dental-only, vision-only, disability, accident, or long-term care coverage does not disqualify.

IRS Pub 969, p. 5-6

5

2026 expansion: ACA Bronze and Catastrophic plans qualify

Per IRS Notice 2026-05 and the One Big Beautiful Bill Act provisions, all ACA Bronze-tier and Catastrophic marketplace plans are treated as HDHP-compatible for HSA purposes in 2026, even if their deductibles are below the IRS HDHP minimum. This is the single biggest change in HSA eligibility in years, and is under-reported on most editorial sites.

IRS Notice 2026-05; Healthcare.gov

6

Last-month rule and testing period

If you become HDHP-enrolled mid-year, the last-month rule lets you contribute the full annual limit if you are HDHP-covered on December 1. However, you must remain HDHP-covered for all of the following calendar year (the testing period). Fail the testing period and the excess contribution is included in income plus a 10% penalty.

IRS Pub 969, p. 6-7

2026 HDHP numbers: Minimum deductible $1,700 self / $3,400 family. Maximum OOP $8,500 self / $17,000 family. Source: IRS Rev. Proc. 2025-19.

HRA eligibility rules

You must be a W-2 employee. The HRA rules under IRS Publication 969 and 26 USC 106 allow reimbursements only to current or former employees. The IRS does not treat a sole proprietor, single-member LLC owner (unless their LLC is taxed as a C-corporation), partner in a partnership, or more-than-2% S-corp shareholder as a W-2 employee of their own business for HRA purposes.

Your employer must set up and fund the plan. Employees cannot contribute to an HRA. All HRA contributions come from the employer and are not wages to the employee. The employee has no ownership of HRA funds - they revert to the employer at plan year end (or at termination).

Spouses and dependents may be covered. An HRA can cover the employee's spouse and tax dependents, subject to plan design. The employee's eligible dependents do not individually need to be W-2 employees.

Sole proprietors: you cannot use an HRA yourself. You can offer a QSEHRA or ICHRA to your genuine W-2 employees (a legitimately employed spouse counts in some structures), but you personally cannot receive HRA reimbursements. See the self-employed guide.

Can you have both an HSA and an HRA?

The default answer is no - a general-purpose HRA disqualifies HSA contributions. But the IRS permits four specific HRA designs that are compatible with an HSA.

Limited-purpose HRA

Covers only dental and vision expenses. Does not reimburse general medical. Because it does not replace the HDHP deductible, it does not disqualify HSA contributions. Most common design in employers who want to offer both.

Post-deductible HRA

Activates only after the employee has met the full HDHP deductible for the year. Until then, it covers nothing. After the deductible is met, it reimburses medical expenses like a normal HRA. HSA contributions remain valid until the deductible is met.

Retirement HRA

Can only be used by former employees (retirees). Active employees cannot access it. Since an active employee has no access to reimbursement, the IRS does not treat it as disqualifying coverage. Rare in practice.

Suspended HRA

The employer formally waives the employee's right to reimbursement for the entire plan year (usually in writing during open enrollment). The employee receives no HRA funds that year and remains HSA-eligible. The suspension must be for the full plan year.

Source: IRS Publication 969 (2025 ed.); IRS Notice 2004-45; IRS Notice 2008-59

The Medicare timing trap

Many people approaching 65 who are still working and on an HDHP plan to keep contributing to their HSA until they actually retire. The trap: when you eventually claim Social Security, the Social Security Administration automatically enrolls you in Medicare Part A retroactively - up to six months back.

If you make HSA contributions during those six months, they become excess contributions after the fact and are subject to income tax plus a 6% excise tax per year they remain in the account. Stop contributing six months before you plan to claim Social Security, or consult a tax professional to model the timing.

IRS Pub 969, p. 4; Medicare.gov enrollment rules

FAQ

What makes someone eligible for an HSA in 2026?+
You are HSA-eligible if you are: (1) covered by an HDHP (2026: minimum $1,700 self / $3,400 family deductible); (2) not enrolled in Medicare Part A or B; (3) not claimed as a tax dependent on someone else's return; and (4) not covered by any other disqualifying coverage such as a general-purpose FSA, full-purpose HRA, or TRICARE. Starting in 2026, all ACA Bronze and Catastrophic marketplace plans are HSA-eligible regardless of whether their deductibles meet the technical HDHP floor.
Can I have an HSA and an HRA at the same time?+
Yes, in four specific designs: (1) a limited-purpose HRA covering only vision and dental expenses, (2) a post-deductible HRA that activates only after you have met your HDHP deductible, (3) a retirement HRA that can only be used by former employees, and (4) a suspended HRA where your employer has formally waived all reimbursements for the plan year. Any other HRA design - one that covers general medical expenses from day one - disqualifies you from making HSA contributions.
Does Medicare enrollment affect my HSA?+
Yes - critically. You cannot make HSA contributions for any month in which you are enrolled in Medicare, including Medicare Part A. If you delay Medicare enrollment after your initial enrollment period, be aware that Social Security retroactively enrolls you in Part A up to six months prior when you finally claim benefits. This means if you delay Social Security past age 65, your last six months of HSA contributions may be disqualified retroactively. Stop contributing the month your Medicare coverage begins.
Who is eligible for an HRA?+
An HRA can only reimburse W-2 employees of the sponsoring employer. Sole proprietors, single-member LLC owners (unless taxed as a C-corp), partners in partnerships, and more-than-2% S-corp shareholders cannot receive HRA reimbursements for themselves. A sole proprietor can offer an HRA (QSEHRA or ICHRA) to their W-2 employees, but cannot benefit personally. An employee's spouse and dependents may be covered depending on the plan design.
What is the 2026 ACA Bronze HSA expansion?+
Per IRS Notice 2026-05 and provisions in the 2025 reconciliation legislation, all ACA Bronze and Catastrophic marketplace plans are treated as HSA-eligible plans for 2026 plan years, regardless of whether their deductibles technically satisfy the IRS HDHP minimum thresholds. This significantly expands the pool of marketplace plans you can pair with an HSA. Plans purchased outside the ACA marketplace (short-term plans, association plans) are not covered by this expansion and must individually qualify as HDHPs.
Related:2026 HDHP limitsSelf-employed rulesQSEHRAICHRALeaving your jobHDHP vs PPO (hdhpvsppo.com)