Health Savings Account (HSA)

Introduction

A Health Savings Account (HSA) is a tax-advantaged savings account available to people who has a high deductible health insurance plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit.

2026 HSA Contribution Limits

For the 2026 tax year, the IRS has adjusted the contribution limits to account for inflation:

• Individual Coverage: $4,400
• Family Coverage: $8,750
• Catch-up Contribution: Individuals age 55 and older can contribute an additional $1,000.

Key Regulatory Rules

HRA vs. HSA Funding

Crucial Compliance Note: An HRA (including ICHRA and QSEHRA) cannot be used to directly fund an HSA. While an employee can have both, the HRA reimbursements are for medical expenses and premiums, whereas HSA contributions must come from the individual or employer specifically as HSA deposits. Furthermore, to remain HSA-eligible, the HRA must be 'limited-purpose' or 'post-deductible'.

Tax Advantages

HSAs offer a triple tax advantage: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free.

Why SimplyHRA is Your HSA Partner

SimplyHRA helps employers set up ICHRA plans that are compatible with HSAs, ensuring your workforce can maximize their tax-advantaged savings without violating IRS rules. Reach out to us at info@simplyhra.com for a 2026 compliance consultation.