What Is an HSA?

A smarter way to save for healthcare

A health savings account, or HSA, is a personal savings account that can be used to pay for medical, dental, vision, and other qualified expenses now or later in life.

  • You must be enrolled in a qualified high-deductible health plan
  • Your HSA balance rolls over from year to year, earning interest along the way
  • You can even opt to invest the funds in your account*
Working through hospital bills
Triple the tax benefits

Money goes in tax-free

Most employers offer a payroll deduction through a Section 125 Cafeteria Plan, and your contribution can be deposited into your HSA before taxes are applied to your paycheck, making your savings immediate. You can also contribute to your HSA post-tax and claim the deduction when filing your annual taxes.

Money grows tax-free

The interest you earn on the money in your health savings account is accumulated on a tax-free basis. And, unlike most savings accounts, the interest earned on HSA funds is not considered taxable income when the money is used to pay for eligible medical expenses.

Money comes out tax-free

Eligible health care purchases can be made tax-free with your HSA. You can pay for these expenses directly from your HSA, whether it's through your benefits debit card, ACH, online bill pay, or by reimbursing yourself with HSA funds for out-of-pocket purchases.

Contribution Limits

Health savings accounts

Year Family
Catch-Up for
Those Age 55+
2019 $7,000 $3,500 $1,000
2020 $7,100 $3,550 $1,000
2021 $7,200 $3,600 $1,000


Frequently Asked Questions

What health care expenses does my HSA cover?

You can use your HSA funds for a variety of IRS-qualified medical expenses, including many that aren’t covered by your HDHP. This includes deductibles, co-insurance, prescriptions, dental and vision care, and many more. Refer to IRS Publications 969 and 502 for a more complete list of qualified medical expenses.

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a special tax-advantaged savings account similar to a traditional Individual Retirement Account (IRA) but designated for medical expenses. An HSA allows you to pay for current eligible health care expenses and save for future qualified medical and retiree health care expenses on a tax-favored basis.

HSAs provide triple-tax advantages: contributions, earnings, and qualified distributions all are exempt from federal income tax, FICA (Social Security and Medicare) tax and state income taxes (for most states).

Unused HSA dollars roll over from year to year, making HSAs a convenient and easy way to save and invest for future medical expenses. You own your HSA at all times and can take it with you when you change medical plans, change jobs or retire.

How much can I contribute to an HSA?

For 2019, the combined maximum contributions to your HSA, including any made by your employer to your account, are $3,500 if you have individual coverage and $7,000 if you have family coverage. If you turn age 55 or older in 2018, you may add up to $1,000 more as a “catch up” contribution.

These amounts are valid as long as you enroll in qualified HDHP coverage before the first day of December, meaning you have held at least one full month of HDHP coverage, and so long as you continue to maintain qualified HDHP coverage for the next 12 months. Otherwise, you may be eligible to contribute a prorated amount to your HSA account.

The IRS determines these maximum contribution limits annually.

Who is eligible for an HSA?


Annual Deductible

Out-of-Pocket Expenses

2019 At least $1,350 for individual coverage and $2,700 for family coverage Not exceeding $6,750 for individual coverage and $13,500 for family coverage
2020 At least $1,400 for individual coverage and $2,800 for family coverage Not exceeding $6,900 for individual coverage and $13,800 for family coverage
  • Are covered by a qualified high-deductible health plan (HDHP) on the first day of a given month.
  • Are not covered by another non-HDHP, such as a health plan sponsored by your spouse’s employer.
  • Are not enrolled in Medicare or TriCare.
  • Have not received VA benefits at any time during the preceding 3 months. If you are a veteran with a service-connected disability, this exclusion does not apply.
  • Are not claimed as a dependent on another individual’s tax return.

*Other exceptions & restrictions may apply. Please consult a tax or legal professional to discuss your personal circumstances.

How do I access my HSA funds to pay for qualified medical expenses?

You can pay for IRS-qualified medical expenses with funds from your HSA by using your debit card. You can also pay for part of all of your IRS-qualified medical expenses out-of-pocket and reimburse yourself later with HSA funds.

How is my HSA taxed?

Contributions, investment earnings, and distributions for qualified medical expenses all are exempt from federal income tax, FICA (Social Security and Medicare) tax and state income taxes (for most states). or penalty.

*Investment products: Not FDIC Insured — No Bank Guarantee — May Lose Value.