If you have a high deductible health plan through work or the ACA marketplace, you may have heard about Health Savings Accounts, or HSAs, without fully understanding how they work. Here is a plain English breakdown of what an HSA actually is, who qualifies in Texas, how much you can contribute in 2026, and what kinds of medical expenses you can actually use that money for.
What Is an HSA?
A Health Savings Account is a tax advantaged savings account that only people enrolled in a qualifying high deductible health plan (HDHP) can open. Money goes in before taxes, grows tax free while it sits in the account, and comes out tax free as long as it is spent on qualified medical expenses. Unlike a Flexible Spending Account, there is no use it or lose it deadline. Whatever you do not spend simply rolls over year after year and stays with you even if you switch jobs, switch insurance plans, or retire.
You, your employer, or both can contribute to the account. Some people treat it like a checking account for medical bills as they come up. Others treat it more like a long term savings account, letting the balance grow for years since there is no deadline to spend it.
Who Qualifies for an HSA in Texas?
Eligibility rules for HSAs are federal, so they work the same way in Texas as anywhere else in the country. To open and contribute to an HSA, you generally need to be enrolled in a qualifying HDHP and not have other disqualifying health coverage, such as being enrolled in Medicare or being claimed as a dependent on someone else's tax return.
Texas does not have a state income tax, so there is no separate state tax benefit to weigh the way there might be in some other states. The federal tax advantages, pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified expenses, apply to Texas residents the same as everyone else.
2026 HSA Contribution Limits
The IRS adjusts HSA contribution limits every year for inflation. For 2026, the limits are:
- Self-only HDHP coverage: up to $4,400 per year
- Family HDHP coverage: up to $8,750 per year
- Catch-up contribution (age 55 and older): an additional $1,000 per year
These limits combine both employee and employer contributions. Contributions for a given tax year can generally be made up until the following year's tax filing deadline, so there is some flexibility to top off your account after the calendar year ends.
What Medical Expenses Can You Pay for With HSA Funds?
The IRS defines qualified medical expenses fairly broadly. Generally, HSA funds can be used for costs like:
- Doctor and specialist visits, including copays and coinsurance
- Prescription medications
- Dental care, including cleanings, fillings, and orthodontics
- Vision care, including eye exams, glasses, and contacts
- Mental health services, including therapy and counseling
- Diagnostic services, such as lab work and blood tests ordered by a physician
- Certain over-the-counter medications and menstrual care products
Not every health-related purchase qualifies, so it is worth checking IRS Publication 502 or asking your HSA administrator before assuming a specific expense is eligible. Saving receipts and documentation is also a good habit, since you may need to show that a withdrawal was used for a qualified expense if the IRS ever asks.
Can HSA Funds Be Used for Concierge Medicine or Direct Primary Care in Texas?
As of January 1, 2026, a new federal law allows HSA funds to be used for direct primary care and similar membership-based medical arrangements, something that was not previously allowed. There are caps on this specific use, up to $150 per month for an individual and $300 per month for a family, and the arrangement generally has to consist solely of primary care services to qualify. Texas has had a specific state law recognizing direct primary care as separate from insurance since 2015, which has helped this model grow across the state well ahead of the federal change.
Diagnostic lab work ordered as part of a course of care, including mobile blood draws, generally falls under the same qualified medical expense rules as any other physician-ordered testing. For patients working with concierge or executive health practices in Texas that use mobile phlebotomy services like Signature House Call to collect labs at home or in the office, it is worth confirming the specific billing details with your practice and tax advisor so you know exactly what your HSA can and cannot cover.
Frequently Asked Questions
How much can I contribute to my HSA in 2026?
Up to $4,400 for self-only coverage or $8,750 for family coverage, plus an additional $1,000 if you are 55 or older.
Do I need a high deductible health plan to open an HSA?
Yes. You can only contribute to an HSA if you are enrolled in a qualifying high deductible health plan and do not have other disqualifying coverage.
Does Texas offer any additional state tax benefit for HSAs?
No. Texas does not have a state income tax, so the federal HSA tax advantages apply the same way they would anywhere else, without an additional state-level benefit or drawback.
Can I use HSA funds for concierge medicine or direct primary care?
As of January 1, 2026, yes, up to certain monthly caps, provided the arrangement meets specific federal requirements. Confirm the details with your practice and a tax advisor.
What happens to unused HSA funds at the end of the year?
Nothing. Unlike a Flexible Spending Account, HSA funds roll over automatically every year and stay with you even if you change jobs or insurance plans.