What Is an HSA?

An HSA — Health Savings Account — is a special bank account that lets you save money for healthcare costs, tax-free. It's one of the most powerful financial tools most employees never fully use.

The Triple Tax Advantage

HSAs are the only account in the U.S. tax code with three layers of tax benefits:

1. Contributions are pre-tax — money goes in before taxes are taken out
2. Growth is tax-free — if you invest your HSA funds, gains aren't taxed
3. Withdrawals for healthcare are tax-free — spend it on qualified expenses with no tax owed

Who Can Have One?

You must be enrolled in a High-Deductible Health Plan (HDHP) to contribute to an HSA. That's the only requirement.

2026 Contribution Limits

• Individual: $4,400/year
• Family: $8,750/year
• Age 55+: Add $1,000 catch-up contribution

See current IRS limits →

Limits are set annually by the IRS. The link above always points to the current year's figures.

The Money Rolls Over — Forever

Unlike FSAs, HSA money never expires. If you don't use it this year, it's yours next year. And the year after. Many people use HSAs as a stealth retirement account — saving now, investing the balance, and using it for healthcare in retirement when costs are highest.

What Can You Spend It On?

Qualified medical expenses: doctor visits, prescriptions, dental, vision, surgery, mental health, and much more. The IRS publishes the full list (Publication 502).

One Watch-Out

If you spend HSA money on non-medical expenses before age 65, you'll owe income tax plus a 20% penalty. After 65, it acts like a traditional IRA — you pay income tax but no penalty.