What is an HSA? Understanding Health Savings Accounts

What is an HSA?

A Health Savings Account (HSA) is a personal savings account that allows eligible individuals to set aside pre-tax dollars for qualified medical expenses. Unlike other healthcare accounts, HSAs offer unique benefits including portability, investment options, and indefinite rollover of unused funds.

To be eligible for an HSA, you must be enrolled in a High Deductible Health Plan (HDHP). Once eligible, you can contribute pre-tax dollars that reduce your taxable income while building savings for healthcare needs.

How Does an HSA Work?

HSA accounts work by allowing you to contribute pre-tax money that can be used immediately or saved for future healthcare expenses. Here's how HSA works:

• Contribution: You contribute pre-tax dollars to your HSA account
• Tax Savings: Contributions reduce your taxable income, providing immediate tax benefits
• Growth: Your HSA balance can be invested to grow over time
• Tax-Free Withdrawals: Use HSA funds for eligible healthcare expenses without paying taxes
• Rollover: Unlike FSAs, your HSA balance rolls over year to year, allowing indefinite accumulation

HSA Contribution Limits 2026

HSA contribution limits are set annually by the IRS. For 2026, the maximum HSA contributions are:

• Individual Coverage: $4,150 per year
• Family Coverage: $8,300 per year
• Catch-up Contribution (age 55+): Additional $1,000 allowed

These limits may increase annually based on inflation adjustments. Always verify current HSA contribution limits with your plan provider.

HSA Eligible Expenses List

Your HSA funds can be used for a wide range of qualified medical expenses. Common HSA eligible expenses include:

• Doctor office visits and medical services
• Hospital care and surgical procedures
• Prescription medications
• Dental work and orthodontia
• Vision care and eyeglasses
• Mental health and psychiatric care
• Physical therapy and rehabilitation
• Chiropractic treatment
• Over-the-counter medications and supplies
• Medical equipment and devices

For a complete HSA eligible expenses list, consult IRS Publication 969 or your HSA plan documentation.

HSA vs FSA: Key Differences

While both HSA and FSA are tax-advantaged health accounts, they have important differences. Learn about HSA vs FSA to choose the right account for your needs.

HSA Benefits: Portability, investment options, indefinite rollover, and no "use-it-or-lose-it" rules.

FSA Benefits: Higher annual spending limits and employer contributions may be more generous.

HSA Benefits

Health Savings Accounts offer multiple benefits that make them attractive for health-conscious individuals:

• Triple Tax Advantage: Tax-deductible contributions, tax-free growth, and tax-free withdrawals for eligible expenses
• Portability: Your HSA remains yours when you change jobs or health plans
• Investment Options: Grow your HSA balance through investment opportunities
• Rollover: Unlike FSAs, unused HSA funds roll over indefinitely
• Flexibility: Access your HSA funds anytime for eligible expenses
• Debit Card Access: Use MetLife HSA debit card for easy access to funds

Getting Started with an HSA

To open an HSA account and start saving for healthcare expenses:

• Verify you have a High Deductible Health Plan (HDHP)
• Enroll in HSA through your employer or open an HSA individually
• Access your account through the MetLife HealthSavingAndSpending portal
• Review HSA eligible expenses to maximize your savings
• Consider investing your HSA balance for long-term growth

What Happens to HSA if You Change Jobs?

One of the major benefits of an HSA is its portability. When you change jobs, your HSA account remains yours - it's not tied to your employer. You can continue to use your HSA balance for eligible expenses and maintain your account with your existing HSA provider.