If you’re enrolled in a High Deductible Health Plan, you can use a Health Savings Account (HSA) to pay for medical expenses with pre-tax dollars. Using an HSA can give you a triple tax advantage:
- Your contributions to an HSA are pre-tax, meaning you don’t pay federal income tax, Social Security tax, and in most cases, state income tax on the money you contribute. That can save you 30% or more on eligible medical expenses.
- Earnings on your investments in an HSA are tax-free.
- Withdrawals are tax-free. (This is true unless you use money from your HSA for something other than medical expenses; if you do that, you’ll have to pay federal income taxes and a 10% penalty tax. These rules don’t apply past the age of 65.)
With an HSA, you are in control. The account belongs to you, not your employer. So, you decide whether to use the money now or roll it over to pay for medical expenses in the future (as in, save them for retirement). The account is portable, so you can move the money with you if you change employers or decide to change where the account is held. And, the money in your account can be invested, earning you income on your savings—you decide how it’s invested.
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Contribution Limits
A Health Savings Account is paired with your high deductible health plan. It allows you to set aside money on a before-tax basis for eligible medical expenses you have now, or you can save it to use for qualified medical expenses in the future (even after you retire). Allows you to build a medical nest egg. Contributions, earnings and withdrawals are tax-free as long as you use the funds for qualified medical expenses.
2026 limits: $4,400/individual; $8,750/family (based on who you cover under the medical plan). $1,000 catch up contribution for those 55+
You can make contribution changes anytime throughout the year within the IRS annual limits by contacting payroll@wittenbach.com.
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Contribution Deadline
Employees have 30-days from the end of the plan year to submit claims for expenses incurred during the plan year
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Unused funds carry over?
HSAs are intended to help you prepare for future medical expenses. Contributions, investment earnings and withdrawals are tax-free if used for qualified expenses.
Yes.
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Can I track my account online?
You are responsible for opening and managing your account with an HSA trustee or bank. You own it, not your employer.
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What expenses are eligible?
Generally, eligible expenses include medical, prescription drug, dental and vision deductibles, copays and your portion of coinsurance; COBRA premiums; long-term care premiums; qualified expenses for your dependents. A complete list can be found at www.irs.gov, Publication 502
See www.irs.gov, Publication 502 or 969
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Does an HSA affect my taxes?
Your contributions are tax-free. Contributions your employer makes (if any) do not affect your income. You must file Form 8889 when you file taxes to disclose your contributions for the year.
Yes; you are required to file Form 8889 to disclose your contributions. Speak with your HSA trustee for details or see www.irs.gov, search Publication 969.