A Health Savings Account (HSA) is a personal, tax-advantaged savings account used to pay for medical costs in the United States.
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Definition
A Health Savings Account (HSA) is a personal, tax-advantaged savings account used to pay for medical costs in the United States.
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Basic Rules and Eligibility
- You must be enrolled in a High-Deductible Health Plan to open and fund an HSA.
- You cannot have standard non-HDHP health coverage or be enrolled in Medicare.
- The account belongs to you, meaning the funds stay with you even if you change jobs or insurance plans.
- Unused money rolls over from year to year and never expires.
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Health Savings Accounts offer a "triple tax advantage":
- Contributions are made with pre-tax or tax-deductible dollars.
(Which means you subtract them from your gross income and reduce your taxable income.)
- IWhen invested the nterest and investment earnings grow tax-free.
- Withdrawals are completely free of tax when used for qualified medical expenses.
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2026 Contribution Limits
- Individual Coverage: $4,400
- Family Coverage: $8,750
- Catch-Up Contributions: People age 55 or older can add an extra $1,000 per year.
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- This information is obtained from sources I believe to be reliable.
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