If I am eligible to receive free health care at any VA, can I enroll in the CDHP plan?

The short answer is no.  At the IRS website we have included below, there are a series of questions and answers that have been posed by employers and payers alike regarding Health Savings Accounts and CDHPs (also known as HDHPs – high deductible health plans).  Q&A 5 addresses the question posed here, and we have cut and pasted it below for clarity:

Q-5.  If an otherwise eligible individual under section 223(c)(1) is eligible for medical benefits through the Department of Veterans Affairs (VA), may he or she contribute to an HSA? 

A-5.  An otherwise eligible individual who is eligible to receive VA medical benefits, but who has not actually received such benefits during the preceding three months, is an eligible individual under section 223(c)(1). An individual is not eligible to make HSA contributions for any month, however, if the individual has received medical benefits from the VA at any time during the previous three months.

Because a plan member must enroll in a CDHP in order to open an HSA and because the HSA is automatically opened for the member once they enroll in a CDHP option, this would preclude a member from enrolling in the CDHP since the member is receiving free healthcare at a VA facility.   The only provision that would allow the member – in this instance – to enroll in the CDHP and open an HSA is if he or she either-

  1. Does not receive any care from a VA facility for 3 months  -OR-
  2. Only receives care from a VA facility for a service-connected disability (and it must be a disability)

 

https://www.irs.gov/irb/2004-33_IRB/ar08.html

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