Short answer: A Health Savings Account (HSA) is a tax-advantaged savings account used to pay for qualified medical expenses when you are enrolled in an HSA-qualified high-deductible health plan.
A Health Savings Account, or HSA, allows you to set aside money for medical expenses on a tax-favored basis. It is designed to work alongside a high-deductible health plan (HDHP) and can be used for a wide range of qualified medical costs.
HSAs are often described as having a “triple tax advantage.” Contributions are not subject to federal income tax, the money can grow tax-free through interest or investments, and withdrawals used for qualified medical expenses are also tax-free.
Unlike many other benefit accounts, HSA funds do not expire at the end of the year. The account is owned by you, not your employer, and the balance carries over from year to year even if you change jobs or health plans.
Once you reach age 65, you can continue to use HSA funds tax-free for qualified medical expenses. Withdrawals for non-medical purposes are allowed at that point, though they are generally subject to income tax.
To contribute to an HSA, you must be enrolled in an HSA-qualified high-deductible health plan and meet other eligibility requirements.
Sources
- IRS, Health Savings Accounts (HSAs): https://www.irs.gov/forms-pubs/about-publication-969
- IRS, FAQs on Health Savings Accounts: https://www.irs.gov/faqs/health-savings-accounts-hsas
Content history
Originally published: March 27, 2025
Last reviewed: January 26, 2026