Health Savings Accounts: A Viable Option for Educators Amid Rising Healthcare Costs

As healthcare costs continue to rise, many teachers are considering Health Savings Accounts (HSAs) as a way to manage medical expenses while maximizing tax benefits. HSAs, which are available to individuals enrolled in high-deductible health plans (HDHPs), offer tax-free savings that can be used for qualified medical expenses. However, educators are weighing the potential advantages against the challenges of high upfront costs and funding limitations.

For educators like Angela, a public school teacher in Pennsylvania, HSAs provide a flexible and long-term solution for managing healthcare expenses.

“I like it because, after a couple years, you build up a nice cushion to use towards things like copays and prescriptions,” she said. “But if you don’t need to use it, you’re not wasting that money. You’re saving toward retirement.”

Unlike Flexible Spending Accounts (FSAs), which require funds to be used within a set timeframe, HSAs allow for contributions to roll over year after year, offering a potential retirement savings benefit. According to the IRS, for 2025, an HDHP must have a minimum deductible of $1,650 for self-only coverage and $3,300 for family coverage. The ability to save and invest HSA funds tax-free makes it an appealing option for long-term financial planning.

Despite these benefits, some teachers find HSAs difficult to manage due to the high deductibles required for eligibility. While an HSA can provide a financial cushion for medical expenses, contributing to one requires careful budgeting, especially for educators who may already be managing student loan debt or other financial obligations.
HSAs also come with strict guidelines. Withdrawals are tax-free only if used for qualified medical expenses; non-medical withdrawals before age 65 incur taxes and penalties. Additionally, understanding contribution limits, eligible expenses, and investment options can add complexity to an already busy workload for teachers.

As school districts and policymakers explore ways to improve healthcare options for educators, HSAs remain a potential tool for those seeking to take greater control over their medical expenses. However, teachers are encouraged to evaluate their personal financial situations and consult with benefits coordinators before making a decision.

For more information on how Health Savings Accounts impact educators, visit My Pay My Say.

About My Pay My Say

My Pay My Say (MPMS) is dedicated to empowering educators by providing critical resources, advocacy, and support to navigate challenges in today’s classrooms. MPMS promotes policies that prioritize teacher autonomy, student success, and access to the tools necessary for a high-quality education. Through research, outreach, and actionable solutions, MPMS helps educators make informed decisions and create positive learning environments. Learn more at mypaymysay.com.