HSA – Health Savings Accounts

Health Savings Accounts

A Health Savings Account (HSA) is an account that allows you to save for future medical expenses while incurring other benefits such as:

  • Interest Earnings
    Your savings grow through investment earnings
  • Flexibility
    You use your pre-tax funds to pay current or future medical expenses.
  • Portability
    Your HSA stays with you regardless of change in employment or health coverage.
  • Ownership
    Unused balance carries over from year to year.
  • Triple tax benefits:
    • Tax-deductible contributions
    • Tax-deferred earnings
    • Tax-free withdrawals for qualified medical expenses

Who May Have an HSA?

  • Have coverage under an HSA-qualified “high deductible health plan” (HDHP)
  • Have no other first-dollar medical coverage (with limited exceptions)
  • Are not enrolled in Medicare
  • Cannot be claimed as a dependent on someone else’s tax return

Health Savings Account Rates

Current as of 01/22/2024


About High Deductible Health Plans (HDHPs)

You must have coverage under an HSA-qualified “high deductible health plan” (HDHP) to open and contribute to an HSA. Generally, this is health insurance that does not cover first medical expenses.

Minimum Deductible2023$1,500$3,000
Minimum Deductible2024$1,600$3,200
Maximum Out-of-Pocket Expenses2023$7,500$15,000
Maximum Out-of-Pocket Expenses2024$8,050$16,100

HSA Contributions

You can make a contribution to your HSA each year that you are eligible. HSA contributions are generally tax-deductible. The maximum annual HSA contribution limits for recent years are shown below.


*APY - Annual Percentage Yield

*Fees may affect earnings

Using Your HSA

You can use the money in the account to pay for any “qualified medical expense” permitted under federal tax law. This includes most medical care and service, and dental and vision care.

The following list is a sample of the qualified eligible medical expenses for HSA reimbursement.
(For more information, refer to Publication 502 on the IRS website at www.irs.gov.)

Acupuncture • Pediatrician • Ambulance • Podiatrist • Annual Physical Exam • Prenatal Care • Bandages • Prescription Medication • Chiropractor • Psychiatrist • Contact Lenses • Psychoanalyst • Dental treatment • Psychologist • Diagnostic Services • Specialists • Eyeglasses • Surgery • Gynecologist • Therapy • Hospital Services • Vaccine • Laboratory Fees • Vision Correction Surgery • Nursing Services • Weight Loss Programs • Obstetrician • Wheelchair • Optometrist • X-Rays • Orthodontist

You can use the money in the account to pay for medical expenses for yourself, your spouse, or your dependent children. You can pay the expenses of your spouse and dependent children even if they are not covered by your High Deductible Health Care Plan. HSA distributions not used for qualified medical expenses are subject to ordinary income tax and if taken before age 65, a 20 percent IRS penalty tax will be assessed unless due to death or disability.

How are HSA distributions taxed?

Qualified distributions from your HSA are excludable from gross income. Any other distributions are included in your gross income and are subject to an additional 20% tax on the amount included, except in the following cases:

  • Your death
  • Your disability
  • You reach the age of 65

Any HSA distributions that are not rolled over will be taxed as income in the year they are distributed, unless used for qualified medical expenses. HSA custodians/ trustees are not required to determine whether HSA distributions are qualified. The qualified medical expenses must be incurred only after the HSA has been established.

When is the contribution deadline for funding an HSA?

Any contributions for the taxable year can be made in one or more payments, at the convenience of the individual or the employer, at any time prior to the time prescribed by law (without extensions) for filing the eligible individual’s federal income tax return for that year, but not before the beginning of that year. For calendar year taxpayers, the deadline for contributions to an HSA is generally April 15 following the year for which the contributions are made. Although the annual contribution is determined monthly, the maximum contribution may be made on the first day of the year.

What happens to my HSA in the event of my death?

If you are married and your spouse is your beneficiary, the HSA becomes his/her HSA. If your beneficiary is not your spouse, the HSA ceases to be an HSA effective on the date of your death. The proceeds will be included in the beneficiary’s gross income for the year of death.

Three ways to make contributions to your HSA:

  • Pre-tax salary deductions – if your employer offers this benefit, payroll deductions are exempt from most taxes (Check with your employer)
  • Employer contributions – made directly to your HSA by your employer
  • Direct contributions
    – Transfer from a personal account in person or online
    – Mail in a deposit

Five ways to withdraw funds from your HSA:

  • Debit card
  • ATM
  • Checks
  • Teller
  • Online Bill Payment