Managing Healthcare Expenses with an HSA
Unexpected injuries or illnesses can be stressful, especially when you’re concerned about how to pay for medical care. A Health Savings Account (HSA) can help you prepare for those surprise expenses and give you more control over your healthcare spending.
What Is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a tax-advantaged savings account designed for individuals enrolled in a High Deductible Health Plan (HDHP). It allows you to set aside money for qualified medical expenses.
Qualified Medical Expenses Include:
- Medical care
- Dental services
- Vision care
- Prescription medications
Contribution Limits for 2026:
- Individuals: $4,400
- Families: $8,750
- Catch-up contribution (age 55+): Additional $1,000
Both individuals and employers may contribute, up to the IRS annual maximum.
How an HSA Works & Why It’s Beneficial
HSAs provide several advantages that can support both your healthcare needs and your long-term financial plans.
Key Benefits:
- Tax-free contributions: Money goes in tax-free.
- Tax-free growth: Your balance grows without being taxed.
- Tax-free withdrawals: Funds used for qualified medical expenses are not taxed.
- Rollover flexibility: Unused funds roll over annually with no maximum cap.
- Portability: Your HSA stays with you, even if you change jobs or retire.
- Retirement support: After retirement, funds can be used for non-medical expenses without penalty (though income tax may apply).
Who Is Eligible for an HSA?
To qualify, you must meet all of the following criteria:
- Be enrolled in a High Deductible Health Plan (HDHP)
- Have no other health coverage, except for specifically allowed plans
- Not be enrolled in Medicare
- Not be claimed as a dependent on someone else’s tax return
We’d love to help you open an HSA. Visit any of our offices or open an account online.
*Consult your tax professional about HSA tax details.
