Glossary
Health savings account
Also called HSA
Definition
A health savings account (HSA) is a tax-advantaged account for people with HSA-eligible high-deductible health plans. Contributions are deductible, growth is tax-free and qualified medical withdrawals are tax-free. 2026 limits: $4,4002026 · IRS Rev. Proc. 2025-19 self-only, $8,7502026 · IRS Rev. Proc. 2025-19 family, plus $1,0002026 · IRS Publication 969 at 55.
How health savings account works
Unlike FSAs, HSA balances roll over and can be invested. After 65, non-medical withdrawals are taxed like a traditional IRA, without penalty.
Contributions stop once Medicare begins.
Why it matters to a firm
HSAs are among the most tax-efficient accounts available; advising on funding and investing them adds clear value.
| 2026 figure | Source |
|---|---|
| HSA limit, self-only coverage: $4,400 | IRS Rev. Proc. 2025-19 |
| HSA limit, family coverage: $8,750 | IRS Rev. Proc. 2025-19 |
| HSA catch-up, age 55+ (statutory, not indexed): $1,000 | IRS Publication 969 |
Questions about health savings account
Do HSA funds expire?
No.
Can HSAs be invested?
Yes, with most providers.
When must contributions stop?
When Medicare coverage begins.
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Related terms: High-deductible health plan · Flexible spending account
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