Direct Answer
An HSA (Health Savings Account) is a triple tax-advantaged account for individuals enrolled in a qualifying high-deductible health plan (HDHP). Contributions are pre-tax, growth is tax-free, and qualified medical withdrawals are tax-free. The 2026 limits are $4,400 (self-only) and $8,750 (family), with a $1,000 catch-up for those 55 and older.
Health Savings Account (HSA) Profile: 2026 Limits and Rules
What is an HSA?
A Health Savings Account (HSA) is a tax-advantaged account established under IRC Section 223. To contribute to an HSA, you must be enrolled in a qualifying HDHP, not be covered by any other non-HDHP health insurance (with limited exceptions), not be enrolled in Medicare, and not be claimed as a dependent on another person's tax return.
HSAs are uniquely powerful because they offer the only triple tax advantage available in the U.S. tax code: contributions are deductible (or pre-tax via payroll), growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. No other account combines all three benefits.
Funds in an HSA roll over indefinitely with no "use it or lose it" requirement, unlike a Flexible Spending Account (FSA). Unused balances accumulate and can be invested (typically after reaching a custodian-set cash threshold) in mutual funds or other investments offered by the HSA provider.
2026 Contribution Limits
| Coverage Type | Annual Limit | With 55+ Catch-Up |
|---|---|---|
| Self-only HDHP | $4,400 | $5,400 |
| Family HDHP | $8,750 | $9,750 |
Source: IRS Rev. Proc. 2025-19. The $1,000 catch-up is available to individuals age 55 or older at any point during the tax year. If both spouses are 55 or older, each may contribute a separate $1,000 catch-up, but each must have their own HSA. Employer contributions count toward the annual limit.
Contributions can be made until the tax filing deadline (typically April 15) for the prior tax year. Contributions are deductible as an above-the-line deduction (before AGI) on Form 1040, regardless of whether you itemize.
2026 HDHP Requirements
| Requirement | Self-Only | Family |
|---|---|---|
| Minimum annual deductible | $1,700 | $3,400 |
| Maximum annual out-of-pocket | $8,500 | $17,000 |
Source: IRS Rev. Proc. 2025-19. "Out-of-pocket" includes deductibles, copays and coinsurance, but not premiums. An HDHP may cover preventive care (as defined by IRS Notice 2004-23) before the deductible is met. Under the One Big Beautiful Act of 2025, bronze and catastrophic plans may qualify as HDHPs starting in 2026 if they otherwise meet the deductible/OOP requirements, and direct primary care (DPC) arrangements do not disqualify HSA eligibility.
Withdrawals and Qualified Expenses
Withdrawals for qualified medical expenses (IRC Section 213(d) expenses) are completely tax-free at any age. Common qualified expenses include:
- Medical deductibles, copays and coinsurance
- Prescription drugs
- Dental care (exams, fillings, orthodontia)
- Vision care (exams, eyeglasses, contact lenses, LASIK)
- Mental health services
- Over-the-counter medications (CARES Act, no prescription required since 2020)
- Menstrual care products (CARES Act)
- Long-term care insurance premiums (subject to age-based limits)
- Medicare premiums and cost-sharing (after age 65)
Non-qualified withdrawals: Before age 65, non-qualified HSA withdrawals are subject to ordinary income tax plus a 20% additional penalty. After age 65, non-qualified withdrawals are subject only to ordinary income tax (no penalty), making the HSA function like a Traditional IRA for non-medical spending.
Investing HSA Funds
Most HSA custodians require you to maintain a minimum cash balance (commonly $500-$2,000) before you can invest additional funds in mutual funds, ETFs or other investment options. Once above that threshold, invested amounts grow tax-free.
A common strategy is to pay current medical expenses out-of-pocket (preserving cash) while maximizing HSA contributions and letting the balance grow tax-free. The IRS does not require HSA withdrawals within any time period; you can reimburse yourself for past qualified expenses years or decades later, as long as you keep receipts and the expense occurred after the HSA was established.
There are no RMDs from an HSA. Unused balances pass to a named beneficiary at death; a surviving spouse may treat an inherited HSA as their own, while a non-spouse beneficiary must withdraw the entire balance (subject to income tax) in the year of the account holder's death.
Frequently Asked Questions
- What are the HSA contribution limits for 2026?
- The 2026 HSA contribution limits are $4,400 for self-only HDHP coverage and $8,750 for family HDHP coverage. Individuals age 55 or older by the end of the tax year may contribute an additional $1,000 catch-up contribution, for a maximum of $5,400 (self-only) or $9,750 (family). These limits apply to total contributions from all sources (the account holder plus employer). Source: IRS Rev. Proc. 2025-19.
- What qualifies as an HDHP for HSA eligibility?
- For 2026, a High-Deductible Health Plan must have a minimum annual deductible of at least $1,700 (self-only) or $3,400 (family), and a maximum annual out-of-pocket amount of no more than $8,500 (self-only) or $17,000 (family). No benefits may be paid for covered services (other than preventive care) before the deductible is met. Source: IRS Rev. Proc. 2025-19.
- What are qualified medical expenses for an HSA?
- Qualified medical expenses for HSA purposes are generally those described in IRS Publication 502 that would qualify for the medical expense deduction. These include deductibles, copays, coinsurance, prescriptions, dental care, vision care, and many other out-of-pocket medical costs. Over-the-counter medications and menstrual care products became qualified expenses under the CARES Act. Health insurance premiums generally do not qualify, with limited exceptions.
- What happens to HSA funds at age 65?
- At age 65, an HSA becomes similar to a Traditional IRA for non-medical expenses: you can withdraw funds for any reason without the 20% additional tax penalty. Withdrawals for non-medical expenses are still subject to ordinary income tax. Withdrawals for qualified medical expenses remain completely tax-free at any age. There are no required minimum distributions from an HSA.