Health Savings Accounts (HSAs) for US Expats: Eligibility Rules

You can only contribute to an HSA if you are enrolled in a qualifying high-deductible health plan (HDHP), and most foreign health insurance plans do not qualify as HDHPs under IRS rules, which means most expats cannot make new HSA contributions while living abroad. If you had an HSA before moving abroad, you can keep the account and invest the balance, but you cannot add to it while you are not covered by a qualifying HDHP. The funds in an existing HSA still grow tax-free and can be used tax-free for qualified medical expenses, including medical care you pay for abroad, as long as those expenses would be deductible under US tax rules. Distributions for non-qualified expenses are taxed as ordinary income plus a 20% penalty before age 65, regardless of where you live. Many expats with existing HSAs treat them as additional retirement accounts, making no new contributions while abroad but letting the invested balance grow tax-free for use after returning to the US or in retirement.