Health Savings Accounts in 2027: What to Know Before Choosing a Health Plan
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What Can You Pay for With an HSA?
11/3/20262 min read
Health Savings Accounts in 2027: What to Know Before Choosing a Health Plan
When choosing health insurance, your monthly premium is only part of the picture. Deductibles, prescription coverage, provider networks, and access to a Health Savings Account, or HSA, can also affect your total healthcare costs.
An HSA is a personal savings account that allows eligible individuals to set aside money for qualified medical expenses while receiving federal tax benefits. It works alongside an eligible health insurance plan and does not replace insurance coverage.
How Does an HSA Help You Save?
Eligible contributions may reduce your federal taxable income, earnings grow free of federal income tax, and withdrawals for qualified medical expenses are also tax free. Unlike some other healthcare spending accounts, unused HSA funds carry over each year. The money remains yours even if you change jobs or retire.
For 2027, the annual contribution limit is $4,500 for individual coverage and $9,000 for family coverage. Eligible individuals age 55 or older can contribute an additional $1,000. These limits include contributions from both you and your employer. Your allowable contribution may depend on how long you qualify during the year.
What Can You Pay for With an HSA?
HSA funds can cover qualified medical expenses that have not been reimbursed by insurance or another source. These can include doctor visits, laboratory tests, MRIs, hospital care, surgery, deductibles, copayments, and coinsurance. Prescription medications and eligible medicines sold without a prescription, such as pain relievers and allergy medications, can also qualify.
The account can also help pay for dental care, including cleanings, fillings, root canals, crowns, and orthodontic treatment. Eligible vision expenses include eye exams, prescription glasses, contact lenses, and corrective eye surgery such as LASIK. Mental health treatment, hearing aids, blood glucose monitors, and menstrual care products may also qualify.
You can use your HSA for eligible expenses for yourself, your spouse, and your tax dependents, even if they have different health insurance. Expenses must generally be incurred after the account is established. Keep receipts to document your withdrawals, and remember that an expense cannot be reimbursed twice.
Monthly health insurance premiums generally cannot be paid with HSA funds. Certain exceptions apply, including COBRA coverage and some Medicare premiums. Services performed solely for cosmetic purposes generally do not qualify.
Is an HSA Eligible Plan Right for You?
An eligible plan may offer lower monthly premiums, but you could pay more yourself before reaching the deductible. The tax benefits should therefore be considered alongside your expected medical needs and your ability to handle an unexpected bill.
Before enrolling, compare annual premiums, deductibles, the maximum amount you may have to pay for covered care, prescription benefits, and provider networks. Any employer contribution to your HSA can also make a difference in the overall comparison.
Marketplace Bronze and Catastrophic plans allow access to an HSA, provided you meet the other eligibility requirements. Once you enroll in Medicare, you can no longer make new HSA contributions, but you can continue using your existing balance for qualified medical expenses.
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