Health Savings Account

A Health Savings Account (HSA) is a tax-deductible account that helps individuals and companies offset the impact of a high-deductible health insurance plan. The money in the account helps pay the deductible and any other eligible medical expenses for you, your spouse, and your eligible dependents. The advantage of an HSA is that funds are not taxed when they are withdrawn to pay for qualified medical expenses.

Each year you're responsible for determining your eligibility and allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with your non-taxable distributions. You're encouraged to seek guidance from a tax or legal professional.

You're eligible if you're covered under a qualifying high-deductible health plan (HDHP) and if you answer “no” to the following questions:

1. Do you have other health coverage (except permitted coverage)?
2. Are you enrolled in Medicare?
3. Are you claimed as a dependent on another person’s tax return?

An HDHP is a health plan with an annual individual deductible or a family deductible based on the chart below.

*Subject to annual cost-of-living adjustments.

Yes. To be eligible, the HDHP must limit out-of-pocket expenses, based on the type of insurance coverage for 2026 to no more than $8,500 for you and $17,000 for your family.

*Subject to annual cost-of-living adjustments.

No. If you meet the eligibility requirements, you may participate.

Yes, your employer may make contributions to your HSA. In fact, your family members, and any other person may contribute to your HSA. This applies whether you are employed, self-employed, or unemployed.

The maximum annual contribution amount is the standard limit. It is reduced by any employer contributions to your HSA and any qualified HSA funding distributions from your IRA to your HSA. Also, “catch-up” contributions are available for eligible individuals who are age 55 or older by the end of their taxable year and for any months individuals are not enrolled in Medicare.

You may take a distribution at any time, even if you are not currently eligible to have contributions made to your HSA. HSA distributions used exclusively to pay for or reimburse qualified medical expenses incurred by you, your spouse, or your dependents are not included in your gross income for the year of the distribution.

Any other distributions are included in income unless rolled over. Distributions not used to pay for or reimburse qualified medical expenses or that are not rolled over are subject to an additional 20 percent tax unless made after your death, your disability, or your attainment of age 65.*

*You should always seek the advice of a tax or legal professional for guidance on HSA distributions.

Qualified medical expenses include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease that affects any structure or function of the body, including amounts paid for prescription drugs and items that are not medicines, such equipment, crutches, bandages and diagnostic devices. Note: You are solely responsible for determining if you have a qualified medical expense.