Quick Answer: An HSA is a special savings account that lets you set aside pre-tax money to pay for medical expenses. It comes with a "triple tax advantage" - your contributions, growth, and qualified withdrawals are all tax-free. You need a High Deductible Health Plan (HDHP) to have one.
The Simple Explanation
Think of an HSA like a savings account, but specifically for health expenses - and with incredible tax benefits. You put money in before taxes, it can grow through investments (also tax-free), and when you spend it on qualified medical expenses, you don't pay taxes on that either.
That's three layers of tax savings. Financial experts call it the "triple tax advantage" - and it's one of the most powerful savings tools available to anyone.
How Does It Work?
You contribute pre-tax money - Either through payroll deductions or by depositing money yourself (and deducting it on your taxes)
Your money grows tax-free - You can invest your HSA funds in stocks, mutual funds, and more
You spend tax-free - When you use the money for qualified medical expenses, there's no tax on withdrawals
Who Can Open an HSA?
To be eligible, you must: - Be enrolled in a High Deductible Health Plan (HDHP) - Not be enrolled in Medicare - Not be claimed as a dependent on someone else's tax return - Not have other disqualifying health coverage (like a spouse's general FSA)
In 2026, an HDHP means: - Minimum deductible: $1,700 (individual) or $3,400 (family) - Maximum out-of-pocket: $8,500 (individual) or $17,000 (family)
2026 Contribution Limits
Coverage Type | Annual Limit |
Individual | $4,400 |
Family | $8,750 |
Catch-up (age 55+) | Additional $1,000 |
You have until April 15, 2027, to make contributions for the 2026 tax year.
Key Benefits
The money is yours forever - Unlike an FSA, HSA funds never expire and roll over every year
It's portable - Your HSA follows you if you change jobs
You can invest it - Let your money grow through stocks, bonds, and mutual funds
No time limit for reimbursement - You can pay for a medical expense today and reimburse yourself from your HSA years later (as long as the expense happened after you opened the account)
After age 65 - You can withdraw for any purpose without penalty (though non-medical withdrawals are taxed as income)
How Does This Relate to Crates Health?
Many wellness products (gym memberships, fitness trackers, supplements) are qualified medical expenses when you have a Letter of Medical Necessity. That means you can use your HSA funds to pay for them - tax-free.
Crates helps you get the documentation you need to make these purchases HSA-eligible, potentially saving you 30-40% on products you're already buying.
Quick Comparison: HSA vs. Regular Spending
Regular Purchase | HSA Purchase | |
$200/month gym membership | $2,400/year | $2,400/year |
Tax savings (30% bracket) | $0 | ~$720/year |
Effective cost | $2,400 | ~$1,680 |
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