Health Savings Account (HSA)

A Health Savings Account (HSA) is a special tax-advantaged savings account similar to a traditional Individual Retirement Account (IRA), but designed specifically for paying for qualified health care expenses now and/or in the future. The IRS has strict eligibility criteria that you must meet before you can enroll in an HSA and make contributions. Before you sign up for the BWH® Hotels’ HSA medical plan, review these HSA eligibility rules.

Long-Term Savings Advantages
  1. HSA funds can be invested and grow. When your account balance reaches $2,000, you can invest the funds so they grow like any other retirement account.
  2. Roll over unused funds. Funds deposited into your HSA roll over at the end of each year. It’s easy to accumulate dollars in your HSA.
  3. Available for future needs. You can use the funds tax-free for future eligible expenses – even those you may have in retirement (including paying certain insurance premiums, such as Medicare Parts A and B, Medicare HMO, COBRA or a share of retiree medical coverage offered by a former employer).
HSA Qualified Expenses

There are hundreds of eligible medical expenses that can be paid for by your HSA dollars. Some of the most common expenses are listed below. For a complete list, please see the IRS Publication 502, Medical and Dental Expenses

  • Acupuncture
  • Alcoholism or drug addiction treatment
  • Ambulance services
  • Artificial limbs
  • Artificial teeth
  • Bandages
  • Birth control pills and other prescription contraceptives
  • Braille books and magazines (excess cost)
  • Breast reconstruction surgery
  • Car modifications
  • Certain home improvements
  • Chiropractor
  • Contact lenses
  • Crutches, purchase or rental
  • Dental treatment
  • Diagnostic devices
  • Disabled dependent care expenses
  • Eye surgery
  • Eyeglasses
  • Fertility enhancement
  • Guide dog or other animal
  • Hearing aids
  • Lead-based paint removal
  • Legal fees to authorize treatment of mental illness
  • Legal termination of pregnancy
  • Lifetime care-advance payments
  • Long-term care
  • Nursing home and/or services
  • Optometrist
  • Oxygen
  • Prescription medications
  • Psychoanalysis (other than related to training)
  • Smoking cessation programs
  • Special education (if prescribed by doctor)
  • Special home for mentally retarded person
  • Sterilization (reproductive)
  • Telephone or television for hearing
  • Therapy prescribed as treatment
  • Transplants (costs of donor)
  • Transportation and other travel costs for medical care
  • Weight loss program (if prescribed by doctor)
  • Wheelchair
  • Wig (for hair loss if prescribed by doctor)

How the HSA Works

Eligibility

You are eligible to enroll in an HSA and make contributions if:

  • You must be enrolled in the BWH Hotel’s High Deductible Health Plan (Silver), which is a qualified plan for HSA participation.
  • You are not covered under another non-qualified health plan, unless it is also a qualified high deductible health plan. This includes, but is not limited to, health benefits from the Veterans Administration (for non-service related care).
  • You are not enrolled in any Medicare.
  • You are not claimed as a dependent on another person’s tax return.
  • You or your spouse are not enrolled in a medical Flexible Spending Account (FSA) or Health Reimbursement Account (HRA).
  • You are not enrolled in Medicare or Social Security Disability Insurance.

Contributions

When enrolled in the HSA Medical Plan, it’s important to fund your HSA as quickly as possible. Couple this with making smart spending decisions, and this strategy allows you to save money for when you really need it.

You contribute pretax dollars and can adjust your amount anytime during the year, up to the IRS limits: $4,400 for individual coverage or $8,750 for family coverage in 2025. If you’re age 55 or older, you can contribute an extra $1,000 as a catch-up.

One-Time IRA Rollover

You can make a one-time, tax-free rollover from an IRA to your HSA, up to the annual limit ($4,400 or $8,750 in 2026). To avoid taxes, you must stay enrolled in the high-deductible health plan for 12 months after the rollover, unless you leave due to death or disability.

Your Money Stays with You

An HSA is a great way to save for medical expenses that you or your eligible dependents may have right now, during the upcoming year, or in the future. Any money you contribute or invest in the HSA, including earnings, is yours to keep. This is your account! If you decide to enroll in a non-qualified health plan in the future, you can no longer contribute to your HSA, but you can use the money within the account to pay for qualified medical expenses. Plus, you can even take your HSA with you if you leave the company or retire.

Triple-Tax Advantages

The HSA offers triple-tax advantages – both now and in the future. You won’t pay taxes:

  • When you put money into your HSA (contributions)
  • When you pay for qualified expenses (see sidebar)
  • When you earn interest on your investments (if you decide to invest your HSA dollars)