What is a Health Savings Account and Why It Rocks!

The Basics: What is an HSA?

An HSA is a tax-advantaged savings account designed specifically for individuals enrolled in a high-deductible health plan (HDHP). It allows you to set aside pre-tax dollars to pay for qualified medical expenses.

To qualify for an Health Savings Account, you must:

• Be covered by an Hight Deductible Health Plan.

• Not be enrolled in Medicare.

• Not be claimed as a dependent on someone else’s tax return.

In 2025, an HDHP is defined as a health plan with a deductible of at least $1,650 for self-only coverage or $3,300 for family coverage. Out-of-pocket maximums for these plans are $8,300 for individualsand $16,600 for families.

The Triple-Tax Advantage: Why the HSA is a Financial Powerhouse

HSAs offer three layers of tax savings. This is what makes them stand out from other accounts:

Tax-Deductible Contributions

• Contributions to an HSA reduce your taxable income, whether you contribute personally or through payroll deductions.

• In 2025, individuals can contribute up to $4,300 for self-only coverage and $8,550 for family coverage. If you’re 55 or older, you can add a $1,000 catch-up contribution.

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