Health Savings Account (HSA)

What is an HSA?

Health Savings Accounts (HSAs) are tax-advantaged medical savings accounts available to United States taxpayers who are enrolled in a high deductible health plan (HDHP). HSAs are owned by the individual, differentiating them from company-owned health reimbursement arrangements (HRAs) that are an alternate tax-deductible source of funds paired with HDHPs. Unlike a flexible spending account (FSA), HSA funds roll over and accumulate year over year if not spent, with the ability to earn tax-free interest on the account. HSA funds may be used to pay for qualified medical expenses at any time without a federal tax liability.

What is a Qualified High Deductible Health Plan?

A high deductible health plan (HDHP) is a health insurance policy that features higher deductibles and lower premiums than traditional insurance plans. HDHPs can be combined with a health savings account that allows for payment of qualified out of pocket medical expenses on a pre-tax basis.

For 2025, the HDHP required annual deductibles are $1,650 for single coverage  and $3,300 for family coverage .

The 2025, the out of pocket maximums are $8,300 for single coverage  and $16,600 for family coverage. This includes items such as deductibles, copayments, and coinsurance, but not premiums.

For 2026, the HDHP required annual deductibles are $1,700 for single coverage  and $3,400 for family coverage.

The 2026, the out of pocket maximums are $8,500 for single coverage  and $17,000 for family coverage. This includes items such as deductibles, copayments, and coinsurance, but not premiums.

How Much Can I Contribute to an HSA?                     

What Are Qualified Medical Expenses?For 2025, the HSA contribution limits are $4,300 for single coverage and $8,550 for family coverage . There is also a $1,000 catch up contribution allowed for those who are 55 years or older.

2025 IRS Limits

                                                                           Single Plan                 Family Plan

Maximum Contribution Limit                     $ 4,300                       $ 8,550

Minimum Deductible                                     $ 1,650                        $ 3,300

Maximum Out-of-pocket                             $ 8,300                       $ 16,600

Catch-up Contribution (55+)                      $ 1,000                        $ 1,000

For 2026, the HSA contribution limits are $4,400 for single coverage and $8,750 for family coverage . There is also a $1,000 catch up contribution allowed for those who are 55 years or older.

2026 IRS Limits  

                                                                           Single Plan                 Family Plan

Maximum Contribution Limit                     $ 4,400                       $ 8,750

Minimum Deductible                                     $ 1,700                        $ 3,400

Maximum Out-of-pocket                             $ 8,500                       $ 17,000

Catch-up Contribution (55+)                      $ 1,000                        $ 1,000

You can pay for a wide range of IRS-qualified medical expenses with your HSA, including many that aren't typically covered by health insurance plans. This includes deductibles, co-insurance, prescriptions, dental and vision care, and more. For a complete list of IRS-qualified medical expenses, visit irs.gov.

 

Information Sourced From: https://www.irs.gov/pub/irs-irbs/irb19-22.pdf