To qualify for a tax-exempt Health Savings Account, what must S be enrolled in?

To qualify for a tax-exempt Health Savings Account (HSA), an individual must be enrolled in a high-deductible health plan (HDHP). This requirement is fundamental because HSAs are specifically designed to work alongside HDHPs, which typically have higher deductibles and lower premiums compared to traditional health plans.

The rationale for this is that HDHPs encourage individuals to take greater responsibility for their healthcare expenditures, thus promoting cost-conscious decision-making when seeking medical services. The combination of a high-deductible health plan and an HSA allows individuals to save money tax-free for eligible medical expenses.

In contrast, being enrolled in Medicare, a standard health plan, or a managed care plan does not meet the criteria for HSA eligibility. These options generally do not provide the required high deductible or the cost-sharing structure to qualify for contributions to an HSA. Therefore, enrollment in a high-deductible health plan is essential for maintaining the tax-advantaged status of an HSA.