What Is a Health Savings Account?
A Health Savings Account (HSA) is a tax-advantaged savings account designed to help people with high-deductible health plans (HDHPs) save for medical expenses. HSAs offer a unique triple tax benefit that no other savings vehicle provides.
The Triple Tax Advantage
- Tax-deductible contributions: Money you put in reduces your taxable income
- Tax-free growth: Interest and investment earnings grow tax-free
- Tax-free withdrawals: Money spent on qualified medical expenses is never taxed
Who Qualifies for an HSA?
To open and contribute to an HSA, you must be enrolled in a qualifying high-deductible health plan (HDHP), have no other health coverage, not be enrolled in Medicare, and not be claimed as a dependent on someone else's tax return.
2026 Contribution Limits
For 2026, the annual HSA contribution limits are set by the IRS. Individuals and families each have maximum contribution amounts, with an additional catch-up contribution allowed for those age 55 and older.
HSA vs. FSA: What's the Difference?
Unlike a Flexible Spending Account (FSA), HSA funds roll over year to year — you never lose your money. HSAs are also portable, meaning you keep the account even if you change jobs or health plans. FSAs typically have a "use it or lose it" provision, though some employers offer a small carryover amount.
Smart HSA Strategies
- Contribute the maximum amount each year
- Invest your HSA funds for long-term growth
- Pay current medical bills out of pocket and let HSA funds grow
- Save receipts — you can reimburse yourself from your HSA at any time
