A health savings account, or HSA, is a type of savings account that lets enrollees set aside money on a pre-tax basis to pay for qualified medical expenses, including deductibles, copayments, coinsurance and some other expenses.
You may contribute to an HSA only if you have a High Deductible Health Plan, which in 2021 is defined as a plan with a minimum deductible of $1,400 for an individual and $2,800 for a family. Contributions to health savings accounts are subject to an annual cap; for 2022, you can contribute up to $3,650 for self-only coverage and up to $7,300 for family coverage into an HSA (if you are over 55, you can contribute an additional $1,000). HSA funds roll over year to year if you don’t spend them. An HSA may earn interest or other earnings, which are not taxable.