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Health Savings Account (HSA)

Health Savings Account (HSA)

Health Savings Accounts are wonderful savings vehicles for healthy individuals who can pay current medical expenses out of pocket.  This brief outline is intended to generate questions for the reader. 

Health Savings Account (HSA)

A Health Savings Account (HSA) is a tax-exempt trust or custodial account established with a qualified HSA trustee to pay or reimburse certain medical expenses.  

Who can establish a Health Savings Account? 

Individuals who are enrolled in a High Deductible Health Plan either through work or on their own. 

What are the Tax Advantages?

  • Contributions are not taxed
  • Interest and Investment Earnings are not taxed
  • Withdrawals to pay for Qualified Medical Expenses are not taxed

What Medical Expenses are considered qualified?  

There are too many qualified expenses to list.  Please refer to Publication 969 of the IRS.  Below are a few common medical expenses:

  • Expenses that would generally qualify for the medical and dental expense tax deduction
  • Long-Term Care insurance premiums
  • Health Care continuation coverage

What are the 2022 annual contribution limits?

  • Self-Coverage        $3,650
  • Family Coverage   $7,200

What are the Pros and Cons of an HSA?


  • It is the best savings vehicle offered 
  • Contributions are not taxed
  • Earnings are not taxed
  • Withdrawals for qualified medical expenses are not taxed


  • In the event of an injury/illness, you can expect to pay the plan deductible and maximum out of pocket plan costs before your insurance covers your medical expenses
  • Before starting an HSA be sure to understand the plan deductible and maximum out of pocket costs you may be required to pay. 

Health Savings Accounts are wonderful savings vehicles.  The above describes the general nature of these accounts.  Be sure to consult a professional for a complete understanding and to determine if a HSA is appropriate for you or your family.