A health savings account (HSA) is an individually owned, tax-favored account that allows consumers to pay for qualified health care expenses.
An HSA must be coupled with a high deductible health plan (HDHP) to receive the tax advantages allowed by the IRS. Premiums associated with an HDHP should be lower than a traditional plan, allowing employees to capture the savings to fund an HSA.
Similar to a 401(k) savings plan, individuals can make tax-deductible contributions into an HSA, and the account can earn interest tax free. HSA funds can be used for any qualified out-of-pocket medical expense. HSA funds are commonly used to pay deductible and prescription drug expenses. Once the deductible is met, the health plan begins paying some or all covered expenses, depending on the plan selected.
The growing popularity of HSAs is fueled by the year-round benefits participants enjoy.
HEALTH SAVINGS ACCOUNT (HSA) LIMITS
Self-only contribution (employee + employer)
Family contribution (employee + employer)
HSA catch-up contribution (55 and over)
Self-only HDHP minimum deductible
Family HDHP minimum deductible
Self-only HDHP maximum out-of-pocket
Family HDHP maximum out-of-pocket