A health savings account (HSA) is one of the most powerful savings accounts you can own. An HSA can help you save and pay for qualified medical expenses for yourself, your spouse, and covered dependents—now and in retirement. Yet many people may be overlooking some of the benefits of HSAs. In fact, according to a 2026 Plan Sponsor Council of America survey, 12% of eligible people hadn't even opened an HSA, and 17.5% of account owners didn’t contribute money to their account in the previous year.1 That could mean millions of Americans are missing out by not making HSA contributions that may lower their taxable income and that can be withdrawn tax-free when used to pay for qualified medical expenses.
Even if you’re already saving in an HSA, you might not be maximizing its full potential. Learn more about this account’s potential by checking out these 6 surprising benefits of HSAs.
1. You might be able to super save in your HSA as a young adult
HSA annual contribution limits are set by the IRS each year and can vary depending on how many dependents are covered. For example, in 2026 you may contribute up to $4,400 for individual coverage and up to $8,750 for family coverage. The limits increase in 2027 to $4,500 for individual coverage and $9,000 for family coverage. But if you’re 18 to 26 years old, covered by a parent’s or guardian’s HSA-eligible health plan, and not included as a dependent on their tax return, you could be eligible to open your own HSA and contribute up to the full family-coverage limit each year. That’s double the self-only coverage limit. One watchout: The parent or guardian whose family health plan you’re on can’t use their HSA money to cover your medical expenses if you have your own HSA.
Why take advantage of this under-the-radar rule? Contributing to your HSA early on and investing those savings could potentially lead to more money later in life, when your medical expenses are likely to be higher. If you keep that money invested over the long term, you could benefit from compounding—when your earnings generate earnings of their own. Don’t have $8,750 to spare? Luckily, anyone could contribute to your HSA, so their money could be gifts that keep on giving. But keep in mind: Their contributions can’t lower your taxable income like your own contributions can.
2. You could pay for more than just doctor bills with HSA money
Money saved in your HSA can be used to pay qualified medical expenses—and those aren’t just standard medical bills from the doctor’s office. HSAs generally cover a wide range of medical expenses. Here are some qualified expenses you could pay for with HSA dollars that you might not know about.
- Family planning: Whether you’re trying to expand your family or keep it from growing, your HSA could offset the costs of birth control pills, fertility treatments, and pregnancy tests.
- Health care–related travel: You could use HSA savings to pay for getting to and from surgery and other necessary medical treatments. Your HSA could also cover hotel costs during a medical treatment–related stay for you and a travel companion, up to certain daily limits.
- Vision: HSA dollars could pay for a new pair of glasses, contact-lens solution, and laser eye surgery.
- Dental: HSA savings could cover dentist and orthodontist bills for cleanings, fluoride treatments, and braces.
- Over-the-counter drugs: At the pharmacy, your savings could pay for certain over-the-counter pain relievers and allergy medicines, and also some sunscreens and menstrual products.
- Other expenses: Some more surprising items that your HSA might cover: drug-addiction and stop-smoking programs, crutches, chiropractor visits, certain medically recommended weight loss or weight management programs, insulin, acupuncture, special education for a child with a diagnosed learning disability, and even lead-based paint removal, if certain requirements are met.
Here’s a more complete list of what your HSA could cover, if you have questions about what expenses might qualify. Remember, it’s your responsibility to determine whether or not a particular expense is qualified before you plan to pay for it with HSA money.
3. You could be reimbursed with HSA dollars for years-old qualified medical expenses
An often-overlooked HSA benefit is the ability to reimburse yourself for qualified medical expenses months or even years after you paid them. But there are some rules you have to follow.
- You must have incurred the medical expense after you opened your HSA.
- You can’t have itemized that medical expense as a deduction on your tax return.
- You can't have reimbursed yourself for this expense from another tax-advantaged account, like an FSA.
- Be prepared to show receipts in case the IRS audits you. A recommended approach: Keep both paper receipts and electronic ones for any medical expenses you might want reimbursed from your HSA, and make sure all reimbursement requests are the exact cost of the medical expense to the cent. If you’re enrolled in an employer-sponsored health plan through Fidelity or if you have a Fidelity Health Savings Account® (HSA), our Fidelity Health App can help you manage health care expenses, including your receipts.
This all means that you could prioritize saving in your HSA over getting reimbursements from it. If money’s tight in the future, you could tap into those HSA savings tax-free if you have unreimbursed qualified medical expenses. Bonus: You could invest the HSA money as soon as you contribute it, which could potentially grow while you hold off on getting expenses reimbursed.
4. HSA dollars could pay for some insurance premiums
You can pay premiums using HSAs in the following situations:
- For COBRA coverage, when you lose your employer’s plan because of a job loss or reduced hours but want to pay the extra price to continue having it
- For coverage while receiving unemployment benefits
- If you’re age 65 or older, for coverage for Medicare Parts A, B, and D, and Medicare Advantage (but not Medigap premiums; note that once you are on Medicare, you can no longer contribute to your HSA)
- If you’re age 65 or older, for coverage for employer-sponsored health insurance, including retiree health insurance costs
Even though these circumstances are limited, using HSA money to foot the bill for health insurance while you’re not working could offer some relief.
5. Money in an HSA could be used penalty-free for non-medical expenses after age 65
Before you’re 65, HSA savings could go toward all the qualified medical expenses mentioned above, tax-free. But starting at age 65, you can use savings in your HSA to pay for just about anything, penalty-free. One catch: You have to pay income tax on HSA dollars used for non-medical expenses, similar to withdrawals from a traditional IRA or 401(k). And remember: HSA savings not used for qualified medical expenses before age 65 are subject to a 20% penalty, plus any applicable taxes.
6. You own your HSA, not the employer who sponsored your health plan
One of the most important long-term HSA benefits is portability. Your HSA is completely yours. It doesn’t belong to the employer who sponsored the HSA-eligible health plan. That means you could move the assets to any offering financial company at any time. Just check each company’s fees and investment options before picking a home for your HSA. Don’t yet have an HSA? Find out if you have an HSA-eligible health plan. If you do, you could open an HSA right away.