Health Insurance
Health Savings Accounts and High-Deductible Health Plans
An HSA is a tax-advantaged account for medical costs, available to people covered by a qualifying high-deductible health plan and meeting a few other conditions.
On this page
Health Savings Accounts and High-Deductible Health Plans at a glance
- Two separate things
- The HDHP is the coverage; the HSA is an account you own.
- Eligibility has conditions
- HDHP coverage, no other disqualifying coverage, and more.
- Tax treatment
- Contributions and qualified withdrawals receive favorable tax treatment.
- Limits change yearly
- Contribution limits and HDHP thresholds are set each year.
What is health savings accounts and high-deductible health plans?
A high-deductible health plan (HDHP) is a health plan whose deductible and out-of-pocket limits fall within ranges the IRS sets each year. A health savings account (HSA) is a separate, tax-advantaged account that someone covered by a qualifying HDHP can use to pay for qualified medical expenses.
The account belongs to you, not to an employer or an insurer. IRS Publication 969 describes it as portable — it stays with you if you change employers or leave the work force — and amounts left at the end of the year generally carry over.
Who can contribute
IRS Publication 969 sets out the conditions, which are tested month by month:
- Covered by an HDHPOn the first day of the month.
- No other disqualifying coverageOther health coverage is allowed only in the forms the IRS permits.
- Not enrolled in MedicareEnrollment ends eligibility to contribute.
- Not someone else's dependentYou cannot be claimed as a dependent on another person's return.
How the tax treatment works
- Going inContributions are generally deductible, and employer contributions — including through a cafeteria plan — may be excluded from income.
- Coming out for medical costsDistributions used for qualified medical expenses may be tax free.
- Coming out for anything elseDistributions not used for qualified medical expenses are taxable, and generally carry an additional tax unless an exception such as reaching 65 applies.
Recent changes to which plans qualify
Federal law and IRS guidance have recently widened which plans are treated as HSA-compatible — including bronze and catastrophic plans — and allowed contributions alongside certain direct primary care arrangements. The dates and conditions are in the register below.
Limits and rules by year
The IRS adjusts the HSA contribution limits and HDHP thresholds each year. Each figure names its year and the IRS page it was checked against.
Calendar year 2026 · Nationwide (federal tax law)
HSA contribution limit
$4,400 self-only coverage, $8,750 family coverage
Calendar year 2026 · Nationwide (federal tax law)
HDHP minimum deductible / maximum out-of-pocket
Deductible of at least $1,700 self-only or $3,400 family; out-of-pocket of no more than $8,500 self-only or $17,000 family
Calendar year 2027 · Nationwide (federal tax law)
HSA contribution limit
$4,500 self-only coverage, $9,000 family coverage
Calendar year 2027 · Nationwide (federal tax law)
HDHP minimum deductible / maximum out-of-pocket
Deductible of at least $1,750 self-only or $3,500 family; out-of-pocket of no more than $8,700 self-only or $17,400 family
Every year (set by statute, not adjusted for inflation) · Nationwide (federal tax law)
Additional contribution from age 55
$1,000 a year
Every year (set by statute) · Nationwide (federal tax law)
Withdrawals not used for qualified medical expenses
Taxable as income, plus an additional 20% tax — which does not apply after age 65, disability or death
From January 1, 2026 · Nationwide (federal tax law)
Bronze and catastrophic plans
Treated as HSA-compatible when available through an Exchange
IRS guidance clarifies these plans do not have to be bought through an Exchange to qualify.
Common misconceptions
Each of these is repeated often enough to be worth answering directly.
Often heard
Money left in an HSA is lost at the end of the year.In practice: Amounts that remain are generally carried over, and the account stays with you.
Related reading
Common questions
Is every high-deductible plan HSA-eligible?
Sources
- 1.Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans — Internal Revenue Service (accessed Sep 2026)
- 2.Treasury, IRS provide guidance on new tax benefits for health savings account participants — Internal Revenue Service (accessed Sep 2026)
- 3.High Deductible Health Plan (HDHP) (glossary) — Centers for Medicare & Medicaid Services (accessed Sep 2026)
- 4.Deductible (glossary) — Centers for Medicare & Medicaid Services (accessed Sep 2026)
- 5.Out-of-pocket maximum / limit (glossary) — Centers for Medicare & Medicaid Services (accessed Sep 2026)
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