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on Monday, October 27, 2025
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Celebrate National Health Savings Account Day: Understanding HSAs
This month, on October 15, we observed National Health Savings Account (HSA) Day—a great opportunity to learn more about this tax-advantaged medical savings account available to individuals enrolled in a high-deductible health plan (HDHP).
An HSA functions much like a personal savings account, but the funds are specifically intended for qualified healthcare expenses. Here’s what you should know if you’re considering opening an HSA:
Eligibility
To qualify for an HSA, you must:
- Be enrolled in a High-Deductible Health Plan (HDHP).
- Not have other health coverage, except certain types like dental or vision insurance.
- Not be enrolled in Medicare.
- Not be claimed as a dependent on someone else’s tax return.
Tax Advantages
HSAs offer significant tax benefits:
- Contributions: Made with pre-tax dollars, reducing your taxable income.
- Earnings: Grow tax-free within the account.
- Withdrawals: Tax-free if used for qualified medical expenses.
Qualified Medical Expenses
Funds in an HSA can be used for a variety of medical costs:
- Qualified expenses: Deductibles, dental care, vision services, prescription drugs, and more.
- Non-qualified expenses: Withdrawals for other purposes are subject to income tax and a 20% penalty if you are under age 65.
Contribution Limits
For 2025, HSA contribution limits are:
- Individual: $4,300 (up from $4,150 in 2024)
- Family: $8,550 (up from $8,300 in 2024)
- Catch-up contributions: Individuals age 55 or older may contribute an additional $1,000.
Portability and Rollover
HSAs are designed to provide flexibility:
- Rollover: Unused funds roll over year to year, so you never lose savings.
- Portability: You keep your account even if you change jobs or retire.
Investment Options
Many HSA providers allow you to invest your funds, giving you the potential to grow your savings over time.
National HSA Day is the perfect time to take control of your healthcare savings.
Learn more
To learn more about Health Savings Accounts, visit our HSA Help Center or give us a call!
These tips are provided by the Iowa Bankers Association
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