What Is an HSA and Why It Can Save You Thousands

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Most people have an HSA and aren’t using it properly. Not because they don’t care, but because the rules feel buried under paperwork and buzzwords.

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Here’s what your HSA is actually for, how it saves you money, and how to start using it for real health purchases without overcomplicating the process.

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What Is an HSA?

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An HSA (Health Savings Account) is a tax-free account you can use to pay for eligible health expenses. It’s available to anyone on a high-deductible health plan (HDHP), which many employers now offer.

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Think of it like a health-only debit card with built-in tax advantages.

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Here’s what makes it different from a regular account:

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• Money goes in before taxes
• You don’t pay taxes when you spend it on eligible items
• The money rolls over every year and stays with you even if you change jobs

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Why It’s a Financial No-Brainer

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Using your HSA gives you a discount on your health spending every time you use it.

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For example, if you contribute $1,000 and you're in a 25% tax bracket, you save $250 in taxes. But you still have the full $1,000 to spend. That’s real value. You're using money you never paid taxes on.

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It’s one of the few ways to pay for health needs while reducing your overall tax bill.

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What You Can Spend It On

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Most people stick to using HSAs for copays or prescriptions. But the list goes far beyond that.

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You can use HSA funds for:

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• Therapy and mental health services
• Eye exams, glasses, and dental work
• Lab tests and diagnostics
• Over-the-counter medications and medical supplies
• Wellness products like supplements or fitness gear if they’re medically necessary

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That last part is important. Some items only qualify if a doctor confirms they’re part of a treatment plan. That’s where a Letter of Medical Necessity (LMN) comes in.

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If you don’t want to deal with paperwork, platforms like Wellness Pay simplify this by connecting you with a licensed doctor and handling the LMN process for you. That way, you stay compliant and get the tax savings without guessing.

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2025 HSA Contribution Limits

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For the current tax year:

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• Individuals can contribute up to $4,150
• Families can contribute up to $8,300
• If you’re 55 or older, you can add an extra $1,000

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Your employer can also contribute, and those funds count toward the total.

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Why Most People Don’t Use Their HSA

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It’s not a motivation problem. It’s a clarity problem.

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When rules feel vague and eligibility lists vary by source, most people stop using their HSA altogether. Meanwhile, they’re still paying out of pocket for health expenses that could be covered tax-free.

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That’s where tools like Wellness Pay help. Instead of leaving money unspent, you can:

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• Get the right approvals for less obvious items
• Know what’s actually eligible
• Even flag past purchases you might be able to reimburse

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Bottom Line

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An HSA is only valuable if you use it. It’s not just for emergencies. It’s for everyday decisions that affect your health.

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If you’re already spending money on wellness, your HSA should be working with you. Platforms like Wellness Pay make it easier to unlock those benefits, keep your spending compliant, and make smarter use of money you’ve already earned.