Health Savings Accounts
Learn everything you need to know about Health Savings Accounts and their benefits.

HSAs can be a useful way to save for current and future health care expenses-as long as you follow the IRS’s rules. You can only contribute a certain amount to your HSA each year, but all contributions roll over from year to year.
In 2024, you can contribute up to $4,150 if you are covered by a high-deductible health plan just for yourself, or $8,300 if you have coverage for your family.
In 2025, you can contribute up to $4,300 if you are covered by a high-deductible
health plan just for yourself, or $8,550 if you have coverage for your family.
At age 55, individuals can contribute an additional $1,000.
HSA Basics
A Health Savings Accounts (HSA) have two components: a tax-advantaged savings account coupled with a lower-premium, high-deductible health insurance plan. HSA-qualified high-deductible health plans often cost significantly less in premiums than more traditional health insurance while still providing quality coverage, including preventive care.
Money you save on your health insurance premiums can be deposited into an HSA and qualify as a tax deduction on line 25 on your Form 1040. Your HSA dollars grow tax deferred and can be withdrawn tax free as long as you use them for qualified medical expenses, which includes your health plan deductible as well as vision and dental care not covered by health insurance plans.
While the new health care reform law changed a few aspects of HSAs, their triple-tax advantages remain – money deposited into an HSA is still tax deductible, interest on these savings still grows tax deferred and funds withdrawn for qualified medical expenses are still tax-free. Any money left in the account at the end of the year rolls over to the next year. You own your health savings account and it goes wherever you go.
What’s more, if you are 55 or older, but not yet entitled to Medicare, an extra tax advantage allows you to make an additional contribution of $1,000 annually. Also, if you are 65 or older, there is no penalty if you use HSA funds for non-medical expenses, as long as you pay ordinary income taxes. Of course, you can still use your HSA dollars tax-free for qualified medical expenses even in retirement.
Since the money in the HSA belongs to you – not your insurance company or bank – you decide when to spend and when to save. When you do spend from your HSA for qualified medical expenses, your withdrawals are tax free.”
HSA Guidelines
Health Savings Accounts (HSAs)
Health savings accounts (HSAs) let you save and pay for qualified medical expenses with tax-free dollars. But there are limits to how much you can contribute each year. Overcontributing can lead to unexpected tax penalties. Keep these rules for HSA contributions in mind. And remember: In order to contribute to an HSA, you have to be enrolled in an HSA-eligible health plan.
HSA Contribution Limits
Every year, the Internal Revenue Service (IRS) sets the maximum that can be contributed to an HSA. For example, if your HSA contribution limit for the year is $4,150 (as it is in 2024) and your employer contributes $1,000, you can only contribute $3,150—unless you’re eligible for a catch-up contribution of $1,000.
The amount you can contribute to an HSA each year is determined by whether you are enrolled in self-only or family coverage and if you are age 55 or older.
2024 HSA Contribution Limits
The HSA contribution limits for 2024 are $4,150 for self-only coverage and $8,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
2025 HSA Contribution Limits
The HSA contribution limits for 2025 are $4,300 for self-only coverage and $8,550 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
Spousal Catch-Up Contributions
If you and your spouse are both age 55 or over, not enrolled in Medicare, and otherwise eligible, you each can make $1,000 HSA catch-up contributions, but you must do so in separate HSAs. These contributions can be taken as a tax deduction on your personal taxes.
HSA Eligibility
To contribute to an HSA, you must be enrolled in an HSA-eligible health plan. For 2024, this means:
- It has an annual deductible of at least $1,600 for self-only coverage and $3,200 for family coverage.
- Its out-of-pocket maximum including annual deductible does not exceed $8,050 for self-only coverage and $16,100 for family coverage.
And to contribute to an HSA you must:
- Not be enrolled in a health plan that is not an HSA-eligible plan, nor can you have a full-purpose health care flexible spending account (FSA).
- Not be enrolled in Medicare.
- Not claimed as a dependent on someone else’s tax return.
HSA Contribution Deadline
You generally have until the tax filing deadline to contribute to an HSA. In most tax years, this is at or around April 15.


Additional Information
HSA Distributions
- Distributions are tax-free for qualified medical expenses
- Distributions from an HSA that are not used for qualifiedmedical expenses are includable in the beneficiary’s taxable income and also may be subject to an additional penalty
- Expenses must be incurred after the HSA has been set up
- Removal of funds from account does not have to occur at same time as the actual medical expense
- Distributions may occur even if the individual is no longer eligible to contribute to the HSA
- HSA funds may accumulate for use after retirement
- The HSA holder is entirely responsible for determining the eligibility of the expense as well as for maintaining records and reporting
HSA Bank A Health Savings Account (HSA) is a savings account that is set up with a bank and is a tax-favored account used in conjunction with an HSA-compatible health plan. The HSA concept allows you to contribute funds to the Health Savings Account on a pre-tax or tax-deductible basis, which you may use to pay for eligible medical expenses. All banks have HSA accounts, but I recommend HSA bank for their expertise.