What Is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a tax-advantaged savings account designed for individuals with high-deductible health plans (HDHPs). Funds in an HSA can be used to pay for qualified medical expenses, such as doctor visits, prescriptions, and medical supplies.

How does an HSA work?

• Tax benefits: Contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses.
• Rollover funds: Unlike Flexible Spending Accounts (FSAs), HSA funds never expire and roll over year to year.
• Can be used in retirement: After age 65, HSA funds can be withdrawn for any purpose, though non-medical withdrawals are taxed.

Who qualifies for an HSA?

• Must be enrolled in a high-deductible health plan (HDHP).
• Cannot be enrolled in Medicare or another health plan that isn’t an HDHP.
• Cannot be claimed as a dependent on someone else’s tax return.

How Solace can help

If you're transitioning to Medicare and have an HSA, a Solace advocate can help you understand what expenses are still eligible and how to best use remaining funds. An advocate can also assist in reviewing your healthcare costs and finding ways to maximize savings.

What to do next

Have questions about your HSA and how it fits into your healthcare planning? Find a Solace advocate today.