Glossary — Benefits

Health Savings Account (HSA)

A tax-advantaged account paired with a high-deductible health plan, used for qualified medical expenses.

Definition

An HSA is a tax-advantaged savings account available to employees enrolled in a qualifying high-deductible health plan (HDHP). Contributions are pre-tax (or tax-deductible if made post-tax); growth is tax-free; withdrawals for qualified medical expenses are tax-free. Funds carry over year-to-year and are portable across employers.

For 2026, HSA contribution limits are approximately $4,300 (self) / $8,550 (family); catch-up contributions of $1,000 for age 55+. Employer contributions count toward these limits.

PEOs administering HDHPs typically pair them with HSA enrollment options through partner custodians.

Common questions about Health Savings Account (HSA)

A tax-advantaged account paired with a high-deductible health plan, used for qualified medical expenses.

An HSA is a tax-advantaged savings account available to employees enrolled in a qualifying high-deductible health plan (HDHP).

Most PEO buying decisions touch several related concepts at once. Health Savings Account (HSA) typically comes up alongside the other terms in this category. Closely related terms include Group health insurance, Cafeteria plan (Section 125), High-deductible health plan (HDHP).

Browse the full PEO glossary

This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.

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