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Health Savings Accounts (HSA)

An 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. To contribute to an HSA you must be enrolled in a qualified high-deductible health plan and your contributions are limited annually. If your employer offers payroll deduction, you’ll see immediate tax savings on your contributions.

Since it is a savings account, you are encouraged to save more than you spend. Unlike FSA funds which are “use-it-or-lose-it,” your HSA balance rolls over from year-to-year earning interest along the way. The funds can even be invested1, making it a great addition to your retirement portfolio. The account is portable, meaning if you ever leave your employer, you can take the HSA with you because it’s your money and your account.

HSA Tax Benefits

Triple Tax Advantage:

  • Money goes in tax-free. Most employers offer a payroll deduction through a Section 125 Cafeteria Plan, allowing you to make contributions to your HSA on a pre-tax basis. The contribution is deposited into your HSA prior to taxes being applied to your paycheck, making your savings immediate. You can also contribute to your HSA post-tax and recognize the tax savings by claiming the deduction when filing your annual taxes.
  • Money grows tax-free. The interest on HSA funds grows on a tax-free basis. And, unlike most savings accounts, interest earned on an HSA is not considered taxable income when the funds are used for eligible medical expenses.
  • Money comes out tax-free. Eligible healthcare purchases can be made tax-free when you use your HSA. Purchases can be made directly from your HSA account, either by using your benefits debit card, ACH, online billpay, or you can pay out-of-pocket and then reimburse yourself from your HSA.


HSA Eligibility


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.


HSA Contribution Limits

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

The Internal Revenue Service (“IRS”) has established the following annual contribution limits. At age 55, an additional $1,000 can be contributed annually.


HSA Qualified Medical, Dental & Vision Expenses

Below is a quick reference list of expenses that can be reimbursed from a Health Savings Account. For more detailed information, please refer to IRS Publications 969 and 502. For tax advice, please consult a tax or legal professional.

  • Abdominal supports
  • Acupuncture
  • Alcoholism treatment
  • Ambulance
  • Anesthetist
  • Arch supports
  • Artificial limbs & teeth
  • Autoette (when used for relief of sickness or disability)
  • Birth control pills (by prescription)
  • Blood tests
  • Blood transfusions
  • Braces
  • Cardiographs
  • Chiropractor
  • Contact lenses
  • Contraceptive devices (by prescription)
  • Convalescent home (for medical treatment only)
  • Crutches
  • Dental treatment, except for cosmetic dentistry
  • Dental X-rays
  • Dentures
  • Dermatologist
  • Diagnostic items/services
  • Diathermy
  • Drug addiction therapy
  • Drugs (prescription)
  • Elastic hosiery (prescription)
  • Eyeglasses
  • Eye Exams
  • Fluoridation unit
  • Guide dog
  • Gum treatment
  • Hearing aids
  • Hospital Services
  • Medical Services
  • Medicine
  • Nursing Services
  • Operations
  • Oxygen
  • Psychoanalyst
  • Psychologist
  • Psychotherapy
  • Radium therapy
  • Registered nurse
  • Special school costs for the handicapped
  • Spinal fluid test
  • Splints
  • Sterilization
  • Surgeon
  • Telephone or TV equipment to assist the hard-of-hearing
  • Therapy equipment
  • Transportation expenses (relative to health care)
  • Vaccines
  • Vasectomy
  • Vitamins (if prescribed)
  • Wheelchair/wheelchair maintenance
  • Wigs
  • X-rays

1 Investment HSA Products: Not FDIC Insured - No Bank Guarantee - May Lose Value.