HSAs When You’re Self Employed
Health Savings Accounts for the Self-Employed: A Simple Guide
If you work for yourself, you already know you’re responsible for everything — including your health insurance. A Health Savings Account (HSA) can be one of the smartest tools in your toolkit. It helps you set aside pre-tax dollars for medical costs, gives you more financial control, and pairs well with many private high-deductible plans.
Below is a straightforward breakdown of how HSAs work, who qualifies, and why they’re especially valuable for self-employed individuals and small business owners.
What Exactly Is an HSA?
A Health Savings Account is a special, tax-advantaged savings account you can use to pay for qualified medical expenses. But there’s one big requirement:
You must be enrolled in a High-Deductible Health Plan (HDHP) that meets IRS guidelines.
For reference, yearly deductible and out-of-pocket minimums are set by the IRS and change annually. You can always verify the most up-to-date requirements here:
👉 IRS HDHP/HSA Guidelines: https://www.irs.gov/publications/p969
If you’re covered by an eligible plan, you can open an HSA through a bank, credit union, or reputable HSA provider.
Why HSAs Are a Win for Self-Employed People
Self-employed clients tend to get the biggest benefit from HSAs because they offer:
1. Tax Savings You Can Feel
Contributions to an HSA are tax-deductible. That means you keep more of your income — especially important for freelancers, contractors, and business owners who pay self-employment taxes.
2. Tax-Free Spending on Medical Costs
When you withdraw HSA funds for qualified medical expenses (doctor visits, prescriptions, lab work, etc.), you don’t pay taxes on that money.
3. Money That Rolls Over Forever
There’s no “use it or lose it.” Your HSA balance stays with you year to year, and it’s yours even if you switch plans or change how you work.
4. Long-Term Growth Potential
Many HSA providers let you invest your account once it reaches a minimum threshold. This makes your HSA double as a long-term health and retirement asset.
5. Coverage for Your Family, Too
You can use HSA funds for your spouse and dependents — even if they aren’t on your insurance plan.
For a simple, consumer-friendly overview, this resource is great:
👉 SmartAsset: HSAs for the Self-Employed
https://smartasset.com/checking-account/health-savings-account-for-self-employed
What Can You Use HSA Funds For?
Quite a lot. HSAs can be used for things like:
Doctor visits and specialist care
Prescription medications
Lab work and imaging
Dental and vision expenses
Some over-the-counter medications and supplies
A full list of qualified expenses is available here:
👉 HSA Eligible Expenses (FSA/HSA Store Guide)
https://fsastore.com/learning-center/hsa-eligible-expenses
Why HSAs Pair Well With Private Coverage
This is where I see the biggest advantage for my clients.
Private health plans — especially health-rated options — often offer lower premiums for healthy individuals and self-employed professionals. When you combine a private HDHP with an HSA:
You can save significantly on monthly premiums
You gain more freedom to choose providers
You get a tax-advantaged account that grows with you
You’re not locked into income-based rules or network restrictions common on Marketplace plans
For many higher-income and healthy self-employed clients, this combination strikes the perfect balance between flexibility, savings, and long-term value.
Final Thoughts
An HSA is one of the most powerful financial tools available to self-employed individuals — especially when paired with the right private health plan. If you’re unsure whether you qualify or what type of plan fits best with an HSA strategy, I’m always happy to walk you through the options.
Want to see if an HSA-friendly private plan fits your needs?
Reach out anytime — I can run personalized quotes and help you compare your best options.
