JagInsights › Glossary › Health savings account
What is an HSA?
An HSA is a tax-advantaged account paired with a high-deductible health plan. Eligibility and caps are set by the IRS and change.
A health savings account can be opened only with an eligible high-deductible health plan. Contributions, growth, and qualified medical withdrawals each have tax rules. The IRS publishes the contribution cap, and the cap changes.
Worked example
Someone on an eligible HDHP contributes to an HSA, pays a doctor visit from the account, and that withdrawal for a qualified medical cost is not taxed. Using it for a non-medical cost is a different tax result. This page does not quote this year's cap or say the account is the right one for you.
Why it matters
People hear 'triple tax advantage' and skip the eligibility test. Without the right health plan, there is no HSA.
Questions people ask
Is an HSA a checking account for doctors?
It can pay qualified medical costs. Some people invest a portion they will not need this year. That is a separate decision from whether you qualify.
What happens if I change health plans?
Eligibility to contribute depends on the coverage you have. Existing HSA dollars can usually stay in the account. The IRS and the plan are the source.
Is an FSA the same thing?
No. An FSA is a different account with different rules, including a use-it-or-lose-it design on many plans.
Educational information only. JagInsights is not a financial adviser, broker, or lender. See the Terms and Privacy Policy.