A health savings account, or HSA, is a savings account that you — or you and your employer, if you have an employer-sponsored plan — can put money into, tax-free, that you can use for qualified medical expenses.

To be an eligible individual and qualify for an HSA contribution, you must be covered under a high deductible health plan (HDHP).

If you combine your HDHP with an HSA, you can pay that deductible, plus other qualified medical expenses, using money you set aside in your tax-free HSA. 

An HSA is “portable.” It stays with you if you change employers or leave the work force.

HSAs offer a “tax benefit” for federal taxes:

  • Contributions in an HSA reduce your taxable income.
  • Contributions made by your employer may be excluded from your gross income.
  • Interest or other earnings in an HSA is tax-free.
  • Distributions for qualified medical expenses are tax-free.

Key Facts About HSAs and HDHPs for 2022

Key Facts About HSAs and HDHPs for 2022
HDHP minimum deductible$1,400$2,800
HDHP maximum out-of-pocket expenses$7,050$14,100
Maximum HSA contribution*$3,650$7,300

*Can contribute an additional $1,000 if age 55 or older.