A Health Savings Account is a tax-advantaged account that lets you save money for eligible healthcare expenses using pre-tax dollars. Unlike other benefits, you own your HSA directly and keep it even if you change employers. There are specific eligibility requirements to enroll in an HSA.
What to know
HSAs offer unique advantages:
- You can contribute pre-tax dollars through payroll deductions
- Your employer may also contribute to your account
- Funds roll over year to year with no expiration
- Unused funds can be invested
- The account stays with you if you change jobs
However, HSAs also have specific eligibility requirements:
- You must be enrolled in a high-deductible health plan (HDHP)
- You cannot be covered by other health insurance or coverage
- You cannot be claimed as a dependent on someone else's tax return
- You must be under age 65
Common questions
How much can I contribute?
For 2025, employees with a Health Saving Account (HSA) may elect to contribute up to an annual maximum of:
- $4,300 for self-only coverage
- $8,550 for family coverage
Can I use my HSA for non-medical expenses?
While the account is yours to use as you choose, non-medical withdrawals before age 65 incur taxes plus a 20% penalty. After 65, you pay only regular income tax on non-medical withdrawals.
Can I enroll in a Health FSA as well?
No, you may not hold both a Health FSA and a Health Savings Account at the same time, as a Health FSA would be considered disqualifying coverage. An HSA-compliant alternative is a Limited Purpose FSA. You can read more here: Types of Flexible Spending Accounts
Do I need to keep receipts for my spending?
Yes, the IRS requires documentation that HSA funds were used for qualified medical expenses. Save receipts for all HSA purchases.