With the rising cost of healthcare, having a tax-preferred way to pay for medical expenses can help individuals and families save significantly over time. HSAs offer a triple tax advantage, making them one of the most effective ways to manage healthcare costs:

• Tax-deductible contributions – Reduce your taxable income by the amount you contribute to your HSA.

• Tax-free growth – The balance in your HSA grows without being taxed, allowing funds to accumulate over time.

• Tax-free withdrawals – Funds used for qualified medical expenses are not subject to taxes, providing additional savings.

Because of the significant tax benefits HSAs provide, the IRS sets annual contribution limits. For 2025, the contribution limits are:

• Individuals: Up to $4,300 per year ($4,150 for 2024).

• Families: Up to $8,550 per year ($8,300 for 2024).

• Catch-up Contribution (for those aged 55+): An additional $1,000 per year.

However, to be eligible to contribute to an HSA, individuals must be enrolled in a High-Deductible Health Plan (HDHP) that meets specific IRS criteria. For 2025, an HDHP is defined as:

• Minimum deductible: $1,650 for individuals or $3,300 for families.

• Maximum out-of-pocket expenses: Cannot exceed $8,300 for individuals or $16,600 for families.

Without meeting these requirements, individuals cannot make new contributions to their HSA, although they can still use existing funds.

Health Savings Accounts offer flexibility in how and when you use your savings. Whether you need to cover immediate medical expenses or plan for future healthcare costs, HSAs provide a strategic way to manage your finances.

• Regular Medical Expenses: If you use your HSA for current medical costs, it's beneficial to choose an HSA provider that offers a checking account with no maintenance fees and a debit card for easy access to funds. Debit cards allow direct payments for qualifying medical expenses, reducing the need for reimbursement claims.

• Long-Term Savings & Investment: If you're looking to save for future medical costs, consider an HSA provider with investment options. Since HSAs grow tax-free and distributions for medical expenses are tax-exempt, investing within an HSA provides additional financial advantages by avoiding capital gains and income tax.

Regardless of how you use your HSA, it is critical to keep receipts for all medical expenses, as these records are necessary when making withdrawals to ensure funds are used appropriately.

Whether you have a high-deductible health plan through your employer or are self-insured, you have the freedom to choose an HSA provider that best meets your needs. Not all HSAs are the same—some offer better investment options, lower fees, or more convenient payment methods. Our team can help you select the right HSA to maximize your savings and ensure you get the most benefits from your account.