Health savings accounts

What is an HSA?

Internal Revenue Service (IRS) rules may allow you to pay for your current health care expenses and save for future qualified health expenses on a tax-free basis through a health savings account (HSA).

You, your family members and your employer can make tax-deductible contributions to your account.

You can use your HSA to pay the deductible on your high-deductible health plan (HDHP) and any other qualified expenses (www.irs.gov) your health plan doesn’t cover, such as vision and dental fees, and over-the-counter drugs.

Who qualifies for an HSA

What qualifies as a HDHP?

In 2016, a health plan qualifies as aHDHP if it has:

  Annual deductible of at least: Maximum annual out-of-pocket expenses
Individual coverage $1,300 $6,550
Family coverage $2,600 $13,100

 

HDHPs must comply with state insurance laws and could include preventive care benefits.

You cannot open up an HSA if you:

  • Enroll in Medicare;
  • Received benefits from the Department of Veterans Affairs during the past three months; or
  • Currently participate in an employer-sponsored HSA.

To find out if you qualify, check with your employer’s human resource department.

How much can you deposit into your HSA each year?

For 2016, the maximum amount you can deposit is:

  • $3,350 for single coverage
  • $6,750 for family coverage

If you're age 55 or older, you can deposit additional money (also called catch-up contributions) into your HSA account. The maximum annual catch-up contribution you can make is $1,000.

Where to buy an HSA

Contact your employer or health plan for more information.

See also

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