What Is an HSA?
A Health Savings Account (HSA) is a special savings account that offers a triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free. It's one of the most powerful tax-advantaged accounts available — better than a 401(k) for many people.
HSA Eligibility
You must be enrolled in a High Deductible Health Plan (HDHP) to contribute to an HSA. For 2026, an HDHP is defined as:
- Individual: Minimum $1,650 deductible, maximum $8,750 out-of-pocket
- Family: Minimum $3,300 deductible, maximum $16,600 out-of-pocket
Most Bronze and some Silver plans qualify as HDHPs. Available on both the ACA marketplace and through private carriers.
2026 HSA Contribution Limits
- Individual: $4,400/year
- Family: $8,750/year
- Age 55+: Additional $1,000 catch-up contribution
The HSA strategy for self-employed: Contribute the max to your HSA ($4,400), deduct your health insurance premiums (100% for self-employed), and use the HSA to pay your deductible and copays tax-free. A freelancer in the 24% tax bracket saves ~$1,000/year in taxes through this alone. Plus, HSA contributions reduce your income for ACA subsidy calculations.
HSA vs. FSA
- HSA: Rolls over indefinitely, you own it forever, portable between jobs, can invest it
- FSA: Use-it-or-lose-it (mostly), tied to your employer, lower contribution limit ($3,200)
If you have access to both and are eligible for an HSA, the HSA is almost always the better choice due to rollover and portability.
Related Terms
Last updated: March 30, 2026.
