12/06/2024
What’s a Health Savings Account?
A Health Savings Account (HSA) is a type of personal savings account you can set up to pay certain
health care costs. An HSA allows you to put money away and withdraw it tax free, as long as you use it for qualified medical expenses, like deductibles, copayments, coinsurance, and more.
Banks, credit unions, and other financial institutions offer HSAs. The money you contribute to the account isn’t taxed as long as you use it for qualified, out-of-pocket medical costs, like:
Acupuncture
Ambulance costs
Doctor visits
Hearing aids
Prescription drugs
Psychological therapy/psychiatric care
Qualified long-term care services
What are the benefits of an HSA?
No federal income tax. You aren’t taxed on money you put into it, or on the interest you earn, in an HSA
account. You also don’t pay tax on withdrawals for qualified medical expenses.
No expiration date on funds. Your HSA contributions don’t expire. The money stays in the HSA until you use it.
Possible use for spouse and dependents.
In 2024 & 2025, HSA contribution limits per year for your self-only is $4,150; for family is $8,300. If you’re 55 or older, you can contribute an extra $1,000 to your HSA each year.
The money you take from your HSA to pay for or be reimbursed for qualified medical expenses is tax free.
� If you take money before you’re 65 from your HSA for non-medical costs, or medical costs that don’t qualify,
you’ll have to pay the federal income tax and a 20% tax penalty.
� If you take funds from your HSA after you’re 65 for non-medical costs, you won’t have to pay the 20% tax
penalty, but you’ll still have to pay the federal income tax on that amount.
Also, you must stop contributing to your HSA when you enroll in any part of Medicare. But, you may withdraw money from your HSA at any time to help pay for qualified medical expenses that Medicare or Medicare Supplement Insurance (Medigap) doesn’t cover.
Keep receipts for medical expenses you paid for using HSA withdrawals. You’ll need them to show the money from
your HSA was only used to pay or reimburse qualified medical expenses. It’s your responsibility to keep records of
your medical costs.
Where can I get more information about HSAs?
Visit HealthCare.gov/high-deductible-health-plan to learn more about HSAs.
How can I learn more?
To learn more about coverage through the Marketplace or your benefits and
protections, visit HealthCare.gov or call the Marketplace Call Center at
1-800-318-2596. TTY users can call 1-855-889-4325.
You have the right to get your information in an accessible format, like large print, braille, or audio.
You also have the right to file a complaint if you feel you’ve been discriminated against.
Visit CMS.gov/About-CMS/Agency-Information/Aboutwebsite/CMSNondiscriminationNotice
or call 1-800-318-2596. TTY users can call 1-855-889-4325.
CMS Product No. 11951
September 2024
This product was produced at U.S. taxpayer expense.
Health Insurance Marketplace® is a registered service mark of
the U.S. Department of Health and Human Services.
One way to manage your health care expenses is by enrolling in a High Deductible Health Plan (HDHP) in combination with opening a Health Savings Account (HSA). Learn how HDHPs (High Deductible Health Plans) & HSAs (Health Savings Accounts) can help reduce your overall health care costs. Save more on...
