# Can US expats living in UK contribute to a Health Savings Account (HSA)?



## neekolas86 (Oct 10, 2016)

Are US expats living in the UK eligible to participate in a high deductible health plan (HDHP) thus allowing them to contribute to a health savings account (HSA)? 

IRS Publication 969 does not address expats living in a country providing socialized health care (see page 3, Qualifying for an HSA).

Thanks!


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## neekolas86 (Oct 10, 2016)

bump


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## Crawford (Jan 23, 2011)

As far as I am aware Health plans issued by US insurance companies (including High Deductible plans) are issued to US residents, not citizens living abroad. 

What would be the point as the plans do not cover everyday medical treatment outside of the US.


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## neekolas86 (Oct 10, 2016)

The point would be to capture the tax deduction of HSA contributions plus the option to invest the HSA funds. The HSA essentially offers the benefits of a traditional IRA, which high earners do not qualify for once crossing an income threshold.

One might even consider purchasing expat health insurance from an online broker that would meet the IRS requirements of an HDHP. It might be worthwhile for a high earner if the tax and investing benefits outweigh the costs of the HDHP.

Anyways, I am following up with a CPA and scheduled an appointment to talk with an IRS representative and will report back with any info.


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## neekolas86 (Oct 10, 2016)

This is such a grey area! I contacted the IRS and could not get a straight answer. I also contacted 3 different CPAs in the United States and 1 of them said no and the other 2 said purchasing additional insurance to meet the minimum HDHP requirements would allow an expat to contribute to an HSA.


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## gairloch (Jun 24, 2011)

I think you'd be able to under a a plan that covers foreign health care claim (like FEHB -of which many plans offer overseas coverage or even extensive coverage). But, as previously, said most other US based health plans do not.


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## Bevdeforges (Nov 16, 2007)

One part of the requirements that might rule these out:



> To be an eligible individual and qualify for an HSA, you must meet the following requirements.
> 
> You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
> 
> ...


As I understand it, health coverage in the UK is based on residence there - so you are covered by the NHS and thus ineligible for a HSA back in the US.
Cheers,
Bev


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## gairloch (Jun 24, 2011)

Bev, Residence does make you eligible (as to what I've read and my GP has insisted upon, so I live here thus, I'm eligible). But if you don't sign up for it you won't have it (I don't have NHS 'cause I have not signed up for it --Though I am an exception]. 
>SO if the OP has not signed up for it, he might be able to make it work IF he can find a policy that would cover him BUT, most US plans wouldn't cover an overseas resident (it's not what they do); though there are exceptions for overseas FEHB eligible folks (I know many).
R/


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## Crawford (Jan 23, 2011)

neekolas86 said:


> The point would be to capture the tax deduction of HSA contributions plus the option to invest the HSA funds. The HSA essentially offers the benefits of a traditional IRA, which high earners do not qualify for once crossing an income threshold.
> 
> One might even consider purchasing expat health insurance from an online broker that would meet the IRS requirements of an HDHP. It might be worthwhile for a high earner if the tax and investing benefits outweigh the costs of the HDHP.
> 
> Anyways, I am following up with a CPA and scheduled an appointment to talk with an IRS representative and will report back with any info.


Yes I understand the tax deduction element of having an HSA.

My question as to whether it would be worth it, is based on the premise that to obtain the tax deduction one must obtain a US high deductible health plan.

Such health plans are typically in the $300 to $500 per month premium range if one is 50 or above. 

One can invest in an HSA $3,350 per annum (an additional $1,000 if over 55) or $6,750 per family. Just working on an individual situation with say 30% tax level one would reduce their tax bill by say, $1,300 while paying out over $3,600 in premiums.

A resident in the US has to have insurance, so the premiums are a sunk cost. Taking out an HSA makes good sense. However, having to take out the health plan and paying the premiums while not a resident (you get nothing from the health plan) I'm not sure is a good investment. 

Again, I do not think that you would be offered a plan if you are not a resident. Maybe that should be your first enquiry - would any insurance company in the US offer you a plan?


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