Health Savings Account (HSA)

Savings for Now – and the Future

Before you begin any new adventure, it’s best to carefully plan your travel itinerary so you can enjoy the excursion. That’s what you need to do before enrolling in the HSA Medical Plan. Taking time to learn the ins and outs of this plan will ensure you get maximum savings with your Health Savings Account, administered by Health Equity.

A Health Savings Account (HSA) is a special tax-advantaged savings account similar to a traditional Individual Retirement Account (IRA), but designated specifically for paying for medical expenses you may have now and in the future. This account is governed by IRS rules and you must meet certain eligibility requirements to establish an account and contribute to it.
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Step 1: Meet HSA Eligibility Requirements

The IRS has specific eligibility criteria that you must meet before you can enroll in an HSA and make contributions. Before you sign up for the HSA Medical Plan, ensure you meet the HSA eligibility requirements outlined below.

You are eligible to enroll in an HSA and make contributions if:

  • You are enrolled in the BWH Silver (HSA) Plan, which is a qualified plan for HSA participation.
  • You are not enrolled in coverage under another health plan, unless it is also a qualified high-deductible health plan. This includes, but is not limited to, health benefits from the Veterans Administration or Tricare for active-duty military.
  • You are not claimed as a dependent on another person’s tax return.
  • You or your spouse are not enrolled in a medical Flexible Spending Account (FSA) or Health Reimbursement Account (HRA).
  • You are not enrolled in Medicare or Social Security Disability Insurance

Step 2: Understand HSA Advantages

An HSA is a great way to save for medical expenses that you or your eligible dependents may have right now, during the upcoming year, or in the future.

Triple-Tax Advantages

The HSA offers triple-tax advantages – both now and in the future. You won’t pay taxes:

  • When you put money into your HSA (contributions)
  • When you pay for qualified expenses (see sidebar)
  • When you earn interest on your investments (if you decide to invest your HSA dollars)

Your Money Stays with You

Any money you contribute or invest in the HSA, including earnings, is yours to keep. This is your account! If you decide to enroll in a non-qualified health plan in the future, you can no longer contribute to your HSA, but you can use the money within the account to pay for qualified medical expenses. Plus, you can even take your HSA with you if you leave the company or retire.

Long-Term Savings Advantages

  1. HSA funds can be invested and grow. When your account balance reaches $2,000, you can invest the funds so they grow like any other retirement account.
  2. Roll over unused funds. Funds deposited into your HSA roll over at the end of each year. It’s easy to accumulate dollars in your HSA.
  3. Available for future needs. You can use the funds tax-free for future eligible expenses – even those you may have in retirement (including paying certain insurance premiums, such as Medicare Parts A and B, Medicare HMO, COBRA or a share of retiree medical coverage offered by a former employer).
HSA Qualified Expenses
There are hundreds of eligible medical expenses that can be paid for by your HSA dollars. Some of the most common expenses are listed below. For a complete list, please see the IRS Publication 502, Medical and Dental Expenses

  • Acupuncture
  • Alcoholism or drug addiction treatment
  • Ambulance services
  • Artificial limbs
  • Artificial teeth
  • Bandages
  • Birth control pills and other prescription contraceptives
  • Braille books and magazines (excess cost)
  • Breast reconstruction surgery
  • Car modifications
  • Certain home improvements
  • Chiropractor
  • Contact lenses
  • Crutches, purchase or rental
  • Dental treatment
  • Diagnostic devices
  • Disabled dependent care expenses
  • Eye surgery
  • Eyeglasses
  • Fertility enhancement
  • Guide dog or other animal
  • Hearing aids
  • Lead-based paint removal
  • Legal fees to authorize treatment of mental illness
  • Legal termination of pregnancy
  • Lifetime care-advance payments
  • Long-term care
  • Nursing home and/or services
  • Optometrist
  • Oxygen
  • Prescription medications
  • Psychoanalysis (other than related to training)
  • Smoking cessation programs
  • Special education (if prescribed by doctor)
  • Special home for mentally retarded person
  • Sterilization (reproductive)
  • Telephone or television for hearing
  • Therapy prescribed as treatment
  • Transplants (costs of donor)
  • Transportation and other travel costs for medical care
  • Weight loss program (if prescribed by doctor)
  • Wheelchair
  • Wig (for hair loss if prescribed by doctor)

How Much Can You Contribute

When enrolled in the HSA Medical Plan, it’s important to fund your HSA as quickly as possible. Couple this with making smart spending decisions, and this strategy allows you to save money for when you really need it.

2025 Annual Contributions
Maximum Total Contributions*
Employee only$4,300
Employee + 1 or more dependents$8,550
Age 55+ catch-up contributionsAdditional $1,000
*Contribution maximums are set by the IRS.

Remember, there are long-term benefits to having an HSA. You can roll over unused HSA funds, roll over an IRA, invest your HSA funds and watch them grow, or take your account with you if you ever leave the company.

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One-Time IRA Rollover

You may conduct a once-in-a-lifetime rollover from an IRA into your HSA. The amount applies toward the annual maximum contribution ($4,300 or $8,550 in 2025). You must be enrolled in the high-deductible health plan for a 12-month period after the rollover month or the rollover amount will be taxed, unless you leave the plan due to death or disability.

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