Health Savings Accounts (HSAs) in Tennessee

An HSA is a savings account, not health insurance

A Health Savings Account (HSA) is a tax-advantaged account you can use alongside qualifying health insurance to save for qualified medical expenses. The insurance plan helps cover medical bills; the HSA holds your money. Opening an account does not enroll you in insurance.

For Tennessee individuals, families and self-employed people shopping for under-65 coverage, an HSA-eligible high deductible health plan (HDHP) can be worth comparing. A lower premium is not the whole story: consider what you could afford to pay when you need care.

Source: IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; HealthCare.gov, What are Health Savings Account-eligible plans?. HSA guide sources checked November 6, 2026.

Who can contribute to an HSA?

Under the general IRS rules, you must meet these conditions to contribute:

• You have coverage under an HSA-eligible HDHP on the first day of the month.
• You have no other disqualifying medical coverage. A general-purpose health flexible spending account (FSA), including one through a spouse that covers you, can be a problem. Some limited-purpose arrangements are allowed.
• You are not enrolled in Medicare.
• You cannot be claimed as a dependent on someone else’s tax return.

A high deductible alone does not establish eligibility. Check the plan’s HSA-eligible label and tell your tax professional about any other medical coverage or reimbursement arrangements. The Marketplace bronze-plan exception is explained below.

Source: IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; IRS, Notice 2026-05, Expanded Availability of Health Savings Accounts, Q&A 4. HSA guide sources checked November 6, 2026.

2026 and 2027 HSA contribution limits

These are the regular annual contribution limits for someone eligible all year. Contributions from you, an employer and anyone else count toward the same limit; these are not separate allowances.

Eligible people age 55 or older at the end of the tax year can generally contribute an additional $1,000. If both spouses qualify for catch-up contributions, each must put their own catch-up contribution into their own HSA. Married couples generally share the regular family contribution limit rather than each getting a full family allowance.

Partial-year eligibility, changes in coverage and Medicare enrollment can reduce your limit. The IRS last-month rule has conditions and a testing period; ask a tax professional before assuming you can contribute the full annual amount.

Source: IRS, Revenue Procedure 2025-19, 2026 HSA inflation-adjusted amounts; IRS, Revenue Procedure 2026-24, 2027 HSA inflation-adjusted amounts (Internal Revenue Bulletin 2026-25); IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. HSA guide sources checked November 6, 2026.

Regular HDHP deductible and out-of-pocket thresholds

The IRS publishes these regular HDHP thresholds. The minimum deductible is a floor, not a promise that your plan’s deductible will be that low. The out-of-pocket limit includes covered in-network deductibles, copayments and coinsurance, but not premiums; out-of-network costs can be different.

Important Marketplace exception: Beginning in 2026, bronze and catastrophic plans available as individual coverage through the Marketplace are treated as HDHPs for HSA purposes even if they do not meet these regular deductible or out-of-pocket thresholds. The contribution limits and your other personal eligibility requirements still apply. Do not use this table alone to rule a Marketplace bronze plan in or out.

Source: IRS, Revenue Procedure 2025-19, 2026 HSA inflation-adjusted amounts; IRS, Revenue Procedure 2026-24, 2027 HSA inflation-adjusted amounts (Internal Revenue Bulletin 2026-25); IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; IRS, Notice 2026-05, Expanded Availability of Health Savings Accounts, Q&A 4. HSA guide sources checked November 6, 2026.

HSAs and Tennessee Marketplace plans

Tennessee uses HealthCare.gov. When comparing plans, use the “Eligible for an HSA” filter or check the plan details for “HSA-eligible.” Marketplace bronze and catastrophic plans work with HSAs under the newer rules; plans in other categories may qualify too. Confirm the specific plan and your own eligibility before contributing.

You may still qualify for a premium tax credit with an HSA-eligible Marketplace bronze or other eligible metal-level plan. The credit lowers your insurance premium; the HSA is a separate savings account for qualified expenses. Catastrophic plans do not qualify for premium tax credits.

If you qualify for income-based cost-sharing reductions, compare the extra savings on a silver plan before choosing bronze just for an HSA. Those reductions lower deductibles and other costs and are available only with silver coverage. Check the actual silver plan’s HSA-eligible label rather than assuming it qualifies.

Learn how Marketplace plans and premium tax credits work.

Source: HealthCare.gov, What are Health Savings Account-eligible plans?; HealthCare.gov, Cost-sharing reductions; IRS, Notice 2026-05, Expanded Availability of Health Savings Accounts, Q&A 4. HSA guide sources checked November 6, 2026.

What can you pay for with HSA money?

Tax-free withdrawals are for qualified medical expenses incurred after the HSA is established that have not been reimbursed by insurance or another source. These can include eligible deductibles, copayments and prescriptions. Many dental treatments, eye exams and prescription glasses also qualify. Not every wellness or cosmetic expense qualifies.

Keep receipts and records showing what the expense was, when it happened and that it was not reimbursed elsewhere. You cannot also claim an itemized medical-expense deduction for an expense paid with a tax-free HSA withdrawal. Ordinary Marketplace premiums generally cannot be paid tax free from an HSA; the IRS lists limited insurance-premium exceptions.

Use IRS Publication 969 for HSA withdrawal rules and Publication 502 for examples of medical and dental expenses, with the HSA-specific rules in mind.

Source: IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; IRS, Publication 502, Medical and Dental Expenses. HSA guide sources checked November 6, 2026.

Why people use an HSA — and what to weigh

The potential federal “triple tax advantage” means eligible personal contributions can be deductible even if you do not itemize; employer contributions, including qualifying payroll contributions, may be excluded from income; earnings in the account are tax free; and withdrawals for qualified medical expenses can be tax free. The tax treatment depends on following the rules.

Unused money carries forward, and the account stays with you if you change jobs or coverage. You do not have to spend the balance each year. But the account does not remove your deductible or fund itself. Compare the premium, likely medical bills, network, prescriptions and how much you can comfortably save. Review any account fees and investment risks with the account provider.

Tennessee has no state income tax on earned income, and its former Hall income tax was repealed. For Tennessee wage earners, the main income-tax benefit discussed here is federal, not a state wage-income-tax deduction.

This guide is not tax, legal or investment advice. Chuck cannot give tax advice. Ask a qualified tax professional how HSA rules apply to your household.

Source: IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; Tennessee Department of Revenue, GEN-34, Income Tax Withholding. HSA guide sources checked November 6, 2026.

Shopping now means choosing a 2027 plan

During Open Enrollment in November 2026, you are choosing coverage for the 2027 plan year. Confirm that your selected 2027 plan is HSA-eligible; do not rely on last year’s plan name or benefits.

Enroll by December 15, 2026 for coverage starting January 1, 2027, and pay your first premium as required. Use the 2027 contribution limits for 2027 contributions, subject to your eligibility.

See the Open Enrollment guide.

Source: HealthCare.gov, Dates and deadlines for 2027 health insurance; IRS, Revenue Procedure 2026-24, 2027 HSA inflation-adjusted amounts (Internal Revenue Bulletin 2026-25). HSA guide sources checked November 6, 2026.

How Chuck can help — and where the account is opened

Chuck Huckaby, licensed Tennessee health insurance agent (NPN 1720715), can help compare Marketplace plans, find HSA-eligible options and check networks, prescriptions and available premium tax credits. A consultation is free and takes place by video or phone.

Chuck is not an HSA bank or custodian. You open the separate account with a bank, credit union or HSA administrator that is a qualified HSA trustee or custodian. Your plan or insurer may suggest one, but you can choose a qualified provider separately from your health plan.

Source: IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; HealthCare.gov, What are Health Savings Account-eligible plans?. HSA guide sources checked November 6, 2026.

Medicare changes contribution eligibility

This guide focuses on coverage for people under 65. Beginning with the first month you are enrolled in Medicare, your HSA contribution limit is zero for those months. Retroactive Medicare coverage can affect earlier contributions, so discuss timing with a tax professional. Existing HSA funds can still be used for qualified medical expenses.

Source: IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. HSA guide sources checked November 6, 2026.