Health Insurance
What is a Health Savings Account (HSA) and how does it work?
An HSA is a tax-advantaged account for qualified medical expenses. Must be enrolled in a High-Deductible Health Plan (HDHP). 2026 contribution limits: $4,400 individual / $8,750 family. Triple tax advantage: deductible contributions, tax-free growth, tax-free medical withdrawals. No use-it-or-lose-it — funds roll over indefinitely. At 65: withdraw for any purpose (taxed as income).
Key Points
- Must be enrolled in a High-Deductible Health Plan (HDHP) to contribute
- 2026 contribution limits: $4,400 individual / $8,750 family
- Triple tax advantage: deductible contributions, tax-free growth, tax-free medical withdrawals
- No 'use it or lose it' — funds roll over indefinitely
- At 65: withdraw for any purpose (taxed as income) — functions like an IRA
- Self-employed: HSA contributions are deductible even without payroll