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Health Savings Accounts (HSA's)

HSA’sare used to pay for deductibles and qualified medical expenses for employees with high-deductible health insurance plans (HDHP’s).  HSA’s are actually dedicated savings accounts established at banks/credit unions; the employee owns the account but withdrawals are limited to health expenses.  Contributions to a HSA may be made by an individual, an employer, a family member, another third party, or any combination.  Money not used can remain in the account from year to year; it can be taken out for non-healthcare purposes, but subject to income tax and a 20% penalty if you’re under 65. 

Not everyone can establish an HSA.  Only individuals covered under a HDHP.  The plan requirements for 2015 are as follows:

HSA Qualifications

Self-only Coverage

Family Coverage

  Must have a HDHP with a 
  minimum annual deductible:



  The maximum annual deductible and
  other out-of-pocket expenses are:



HSA Contribution Limits

Self-only Coverage

Family Coverage

 The maximum contribution to the HSA is:



There are additional limitations for contributions based on the type of coverage you have, your age, the date you became eligible, and the date you cease to be eligible.  The IRS Form 8889 and instructions are available on the IRS website. 

Remember, one of the main benefits of an HSA is that the contribution is not subject to social security, federal, and state income taxes!

 Next up: Retirement Benefits