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HSA Basics
How Health Savings Accounts work — and why they're one of the best deals in the tax code.
What is an HSA?
A Health Savings Account (HSA) is a tax-advantaged savings account available to people enrolled in a High-Deductible Health Plan (HDHP). Money you contribute to an HSA is tax-deductible, grows tax-free, and can be withdrawn tax-free for qualified medical expenses — making it the only account in the US tax code with a triple tax benefit.
The Triple Tax Advantage
Contributions are pre-tax
Reduce your taxable income dollar-for-dollar. At 22%, every $100 you contribute saves $22 in federal taxes.
Growth is tax-free
Unused HSA funds can be invested in stocks and bonds. Dividends and capital gains are never taxed.
Withdrawals are tax-free
Spend your HSA on any qualified medical expense at any time, with zero taxes on the withdrawal.
2026 Contribution Limits
| Coverage type | 2026 limit | Rollover |
|---|---|---|
| Individual coverage | $4,300 | Unlimited |
| Family coverage | $8,550 | Unlimited |
| Catch-up (age 55+) | +$1,000 | Unlimited |
Unlike FSAs, HSA funds roll over indefinitely — there is no year-end "use it or lose it" rule. The account is yours permanently, even if you change jobs or health plans.
HDHP Requirement
To contribute to an HSA in 2026, you must be enrolled in a qualifying High-Deductible Health Plan. The IRS defines an HDHP as a plan with a minimum deductible of $1,650 (individual) or $3,300 (family) and maximum out-of-pocket limits of $8,300 (individual) or $16,600 (family).
If your employer offers an HDHP option during open enrollment, check whether you qualify. Many employers also contribute to your HSA — free money that goes directly into your account.
What Qualifies as an HSA Expense?
Qualified medical expenses are defined by IRS Publication 502. They include doctor visits, prescription drugs, dental care, vision care, OTC medications (since the CARES Act of 2020), medical equipment, and thousands of specific products. They do not include general health and wellness, gym memberships, or cosmetics.
Use our eligibility checker or browse our product categories to find specific items.
Investing Your HSA
Once your HSA balance exceeds a threshold set by your administrator (typically $1,000–$2,000), you can invest the remainder in mutual funds or ETFs. This allows your HSA to grow like a retirement account. Many people pay medical expenses out of pocket, save the receipts, and reimburse themselves from their invested HSA years later — maximizing tax-free growth.
There is no time limit on HSA reimbursement. A medical expense from 2026 can be reimbursed from your HSA in 2035, as long as the expense occurred after your HSA was established.
HSA After Age 65
After age 65, you can withdraw HSA funds for any purpose — not just medical expenses. Non-medical withdrawals are taxed as ordinary income (like a traditional IRA) but carry no additional penalty. This makes the HSA function as a second retirement account for people who stay healthy.
Not tax advice
This page is for informational purposes only. For advice specific to your situation, consult a qualified tax professional or your HSA plan administrator.