Health Savings Account (HSA) vs. Traditional Health Plan
Health care expenses and income tax: |
Health savings account (HSA): |
Traditional Health Plan: |
An HDHP with an HSA could save you KJE1 per month |
An HSA is a tax-advantaged account established to pay for qualified medical expenses of an account holder who is covered under a high-deductible health plan. With money from this account, you pay for health care expenses until your deductible is met. Any unused funds are yours to retain in your HSA and accumulate towards your future health care expenses or your retirement.
In order to put money into an HSA you are required to have a High Deductible Health Plan (HDHP) in effect for either you or your family. A HDHP is simply health insurance that meets certain minimum deductible and maximum out-of-pocket expense requirements. This table shows the limits for HSA's in 2025.
| 2025 | 2024 | Change | |
|---|---|---|---|
| HSA Contribution Limit | Single: $4,300 Family: $8,550 | Single: $4,150 Family: $8,300 | Single: +$150 Family: +$250 |
| HSA catch-up contributions* | $1,000 | $1,000 | No change, not indexed to inflation |
| HDHP minimum deductible | Single: $1,650 Family: $3,300 | Single: $1,600 Family: $3,200 | Self-only: +$50 Family: +$100 |
| HDHP maximum out-of-pocket** | Single: $8,300 Family: $16,600 | Single: $8,050 Family: $16,100 | Single: +$250 Family: +$500 |
*Catch-up contributions can be made anytime during the year in which the participant turns 55. **This includes deductible amount, co-payments and other non-premium payments. | |||
Please note, you are no longer eligible to make HSA contributions starting in the first month that you are eligible for and enrolled in Medicare Part A or B.
Source and complete details on HSAs you may wish review: About Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
Number of prescriptions you expect to fill annually.
Number of times you expect to visit the doctor's office annually.
Your estimated Federal marginal income tax rate. Use the ‘Filing Status and Federal Income Tax Rates on Taxable Income’ table to assist you in estimating your federal tax rate.
| Tax Rate | Married Filing Jointly or Qualified Widow(er) | Single | Head of Household | Married Filing Separately |
|---|---|---|---|---|
| 10% | $0 - $23,850 | $0 - $11,925 | $0 - $17,000 | $0 - $11,925 |
| 12% | $23,850 - $96,950 | $11,925 - $48,475 | $17,000 - $64,850 | $11,925 - $48,475 |
| 22% | $96,950 - $206,700 | $48,475 - $103,350 | $64,850 - $103,350 | $48,475 - $103,350 |
| 24% | $206,700 - $394,600 | $103,350 - $197,300 | $103,350 - $197,300 | $103,350 - $197,300 |
| 32% | $394,600 - $501,050 | $197,300 - $250,525 | $197,300 - $250,500 | $197,300 - $250,525 |
| 35% | $501,050 - $751,600 | $250,525 - $626,350 | $250,500 - $626,350 | $250,525 - $375,800 |
| 37% | Over $751,600 | Over $626,350 | Over $626,350 | Over $375,800 |
| *Caution: Do not use these tax rate schedules to figure 2024 taxes. Use only to figure 2025 estimates. Source: Rev. Proc. 2024-40 | ||||
Monthly premium for your proposed health insurance options.
Annual deductible that you are required to pay before your health insurance begins coverage. The tool assumes that after this threshold has been reached that your insurance covers 100% of your expenses. In 2025, for a HDHP, the minimum deductible amount is $1,650 for self-only coverage and $3,300 for family coverage.
Maximum out-of-pocket in a given year for your health insurance. This is the maximum total expense that you could incur in a given year with your proposed coverage. A HDHP must also have a maximum out-of-pocket expense per year. For 2025, the HSA out-of-pocket maximum is $8,300 for self only coverage and $16,600 for family coverage.
The fee you pay for each prescription and/or doctor's visit. These payments do not count toward your annual deductible or your maximum out of pocket expense.
The percentage of your health care costs that your insurance will cover after your costs exceed your annual deductible. You are assumed to continue to pay this percentage of your health care costs until you reach your annual maximum out of pocket expense.
Any other expenses that would normally be covered by your health insurance. This would include lab fees and services other than prescriptions and doctor visits. Don't include medical expenses not normally covered by your insurance such as some elective surgery, contact lens solution or over the counter medications.
Total you expect to contribute to an HSA account per year. All contributions to an HSA account are tax-deductible and withdrawals for qualified medical expenses are not subject to income tax. For 2025, the maximum contribution to an HSA is $4,300 for self-only coverage and $8,550 for family coverage.