Understanding Health Savings Accounts (HSAs)

Healthcare expenses are a part of life, but planning ahead for those costs can help reduce financial stress down the road. A Health Savings Account (HSA) is one option that can help individuals save for qualified medical expenses while also offering potential tax advantages.

If you’re enrolled in a qualifying High-Deductible Health Plan (HDHP), an HSA may be a valuable tool for both short-term healthcare needs and long-term financial planning.

What Is an HSA?

A Health Savings Account is a personal savings account designed specifically for healthcare expenses. Funds contributed to the account can be used for qualified medical costs such as:

• Doctor visits and copays 
• Prescriptions 
• Dental and vision expenses 
• Medical supplies 
• Deductibles and other eligible healthcare costs 

HSA funds belong to you and remain in the account year after year, even if you change employers or health plans.

Benefits of an HSA

Many people choose HSAs because they offer flexibility and long-term savings potential.

Tax Advantages

HSA contributions are typically made with pre-tax dollars, which may help lower your taxable income.1 Earnings in the account grow tax-free, and qualified withdrawals are also tax-free.1

Funds Roll Over Year After Year

Unlike some healthcare spending accounts, unused HSA funds do not expire at the end of the year. Your balance continues to grow and remains available for future healthcare expenses.

Long-Term Savings Potential

Some individuals use HSAs not only for current healthcare expenses, but also as part of a broader long-term savings strategy for retirement healthcare costs.

Flexibility & Control

You decide when and how to use your HSA funds for qualified expenses, giving you greater control over healthcare spending.

Who Can Open an HSA?

To qualify for an HSA, you must be enrolled in a qualifying High-Deductible Health Plan (HDHP). Annual contribution limits are established by the IRS and may change each year.

Contributions can typically be made by:

• You 
• Your employer 
• Family members or others on your behalf 

As long as total contributions stay within annual IRS limits.

Is an HSA Right for You?

An HSA may be worth considering if you:

• Want to prepare for healthcare expenses 
• Are looking for tax-advantaged savings options 
• Prefer flexibility in how healthcare funds are used 
• Want savings that continue rolling over each year 
• Are planning ahead for future medical or retirement expenses 

Because healthcare and financial needs vary from person to person, it’s important to evaluate how an HSA fits into your overall financial goals.

Planning for Healthcare Costs with Confidence

Healthcare expenses can be unpredictable, but having a plan in place can help you feel more financially prepared. An HSA offers a flexible way to save for qualified medical expenses today while building financial security for the future.

If you have questions about HSAs or want to learn more about your options, our team is here to help.

1Consult your tax advisor regarding eligibility and tax advantages.