HSA — Health Savings Account

A Health Savings Account (HSA) is like a special piggy bank for your health care costs. You can only open an HSA if you have a **High-Deductible Health Plan (HDHP)**, which is a type of health insurance that has lower monthly payments but requires you to pay for more of your medical care yourself before the insurance starts paying a lot.Here's how an HSA works: You can put money into this account, and the money you put in isn't taxed. That means you get a tax break for saving for your health. Once the money is in your HSA, it can grow without being taxed, too! Even better, when you use the money from your HSA to pay for approved medical bills, like doctor visits or prescriptions, you don't pay any taxes on those withdrawals either. That's three ways you save on taxes!Each year, there's a limit to how much money you can put in. For 2026 (per IRS Rev. Proc. 2025-19), you can contribute up to $4,400 if it's just for you, or $8,750 if it's for your whole family. Catch-up contribution for age 55+ is $1,000. A great thing about HSAs is that any money you don't use rolls over to the next year and never expires. You can even invest the money in your HSA, helping it grow even more over time for future health needs, even in retirement.One important thing to know is that if you use the money for things that aren't approved medical expenses, you might have to pay taxes on that money and even a penalty fee. So, always make sure your spending is for qualified health costs. See also: <a href="/glossary/hra">HRA</a>.