Effective 1/1/2016, the ability to make Health Savings Account (HSA) contributions will be extended to veterans, provided both of these criteria are met:
- Care is received through a Veteran’s Administration (VA) program
- Care is specifically for a service-connected disability
If the VA hospital care or medical services are specifically affiliated to a service-connected disability, veterans are eligible to contribute to an HSA on a pre-tax basis.
This new legalisation was amended on 7/31/2015 as part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.
Prior to 2016, individuals were not eligible to make HSA contributions for any month that they receive VA medical benefits at any time during the previous three months.
The legislation does not reference if anyone else beyond the eligible veteran (such as an employer) can contribute to that veteran’s HSA.
Note that this excludes TRICARE, which is administered by the Department of Defense and not through the VA.
More information can be found on page 24 (Section 4007) of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015: