Health Savings Accounts—commonly referred to as HSAs—are triple-tax advantage accounts offered by HSA-eligible health plans. In most cases, all deposits are tax-deductible, all growth is tax-deferred, and all withdrawals used on qualifying expenses are tax-free.
Although most often recognized for their use as a tool to cover medical expenses, HSAs are effective wealth-building accounts when they’re left to grow. Here are some lesser-known benefits of HSAs you might not know.
The basics of HSAs
For 2025, the maximum HSA contribution is $4300 for single coverage and $8550 for family coverage. (For those 55 and older, an additional $1000 can be contributed as a catch-up contribution—but more on that later.)
To contribute to an HSA in 2025, you must:
- Be enrolled in an HSA-eligible plan
- Not be enrolled in a full-purpose health care flexible spending account (FSA)
- Not be claimed as a dependent on someone else's tax return
- Not be enrolled in Medicare
Unlike Flexible Spending Accounts (FSAs), funds in an HSA roll over indefinitely. They can also be invested—which is where perhaps their strongest benefit comes in.
Looking beyond medical reimbursement
Using your HSA as an investment vehicle
Many HSAs allow you to invest your funds once you exceed a certain balance. Because HSAs rollover indefinitely, that means they can continue to grow if you decide not to use your funds for medical expenses. However, after you turn 65, HSA funds can then be used for non-medical expenses without penalty.
Portability
HSAs are portable, meaning they are owned by individuals rather than employers. If you don’t like the provider chosen through your work, you are still allowed to transfer your HSA to another provider if fees or options are unfavorable.
Benefits for spouses
As mentioned above, individuals 55 and older can make an additional $1000 in catch-up contributions annually. But even if only one spouse holds the HSA, the other spouse can still make catch-up contributions. Since HSAs are individually owned, the other spouse must open their own HSA and deposit the $1000 there.
Additionally, when the HSA-owning spouse dies, the other spouse is the only one who can inherit the account. Otherwise, all assets will become taxable when the account owner dies.
Benefits for children
Currently, adult children under the age of 26 who are still on their parents’ health plan but not claimed as a dependent on their parents’ tax return can also open their own HSA. Regardless of the parents’ contribution to their own plan, children can fully fund their own HSA with the yearly limit.
Contribution flexibility
If you haven’t maxed out your contributions from the previous calendar year, you can still catch up. If an HSA is set up by the end of the year, the account owner has either until they file their tax return or the due date of that year’s tax return (not including extensions) to fund their account.
Utilize your HSA for lasting impact
By contributing to your HSA, you’re creating an investable long-term retirement account—one that can also be tapped in the case of medical expenses. Contributions to HSAs reduce taxes and can grow tax-free, building a healthy nest egg for your future.