Picking your own health insurance is one of the least fun parts of working for yourself, and it usually happens in a rush, in an open enrollment window, while you are also seeing clients.
Somewhere in that process you have probably come across the letters HSA and a suggestion that you should want one. Maybe from a friend, maybe from a plan comparison page that assumed you already knew what it meant.
So here is what the HSA strategy for solo therapists actually is, and the one question that decides whether it makes sense for you.
What an HSA Is And Who Can Open One?
An HSA is a Health Savings Account. It is a savings account you can only open if you have a particular kind of health insurance, and it gets unusually good tax treatment.
Money goes in before tax, which means it lowers the income you get taxed on. It grows without being taxed. And when you spend it on medical costs, that is not taxed either. Most tax-advantaged accounts give you one or two of those. This one gives all three.
The catch is the insurance you have to pair it with. To open an HSA you need a high-deductible health plan, usually shortened to HDHP, which means you pay more of your own medical costs before the insurance starts covering things.
So the question is never really “are HSAs good”. It is whether the tax treatment is worth carrying a bigger deductible, and that comes down to something quite personal.
Worth knowing the scale before you weigh it up. The IRS sets annual contribution limits for HSAs, which it adjusts each year for inflation. For 2026, the limits are published in IRS Revenue Procedure 2025-19 and cover both self-only and family coverage. Those are ceilings, not targets, and most people contribute well under them.
The Question That Decides Whether an HSA Is Worth It
How much healthcare do you use?
That sounds glib, but it is genuinely the hinge. A high-deductible plan is a bet that you will not need much this year. If you are broadly healthy, do not have an ongoing condition, and mostly use insurance for a check-up and the occasional thing, you are likely to come out ahead. The premiums are lower, and the tax benefit sits on top.
If you have a condition you manage regularly, take medication that costs real money, are pregnant or planning to be, or have a family member on your plan who uses care often, the bigger deductible can wipe out the savings and then some.
Nobody can answer that for you from a spreadsheet, so the honest advice is to look at what you actually spent on healthcare in the last two years, and be realistic rather than optimistic about it.
That number is the one that matters, and most people have never looked it up. The next question is what a bad year on this plan actually looks like.
What A High-Deductible Plan Looks Like In A Bad Year
A therapist we work with switched to a high-deductible plan on the strength of the premium difference. She was healthy, she was in her early thirties, and the monthly savings were real.
She had a knee injury eight months later. She hit her deductible in one go, and that year the switch cost her rather than saved her.
She stayed on the plan anyway. Not because it worked out that year, but because over the four years since, three of them have been quiet, and the HSA balance she has built up in the meantime is now doing a job she did not originally expect it to.
That is the more useful way to think about it. A single year is close to a coin flip. The tax treatment is what makes it worth doing over a run of years, which brings us to the feature that makes the long view work.
Why HSA Money Never Expires
An HSA does not expire.
This is the bit that surprises therapists most, and it is the strongest argument for having one. Money you do not spend stays there. It rolls over year after year; it can be invested once the balance gets past whatever minimum your provider sets, and it is still yours in twenty years.
That makes it something closer to a retirement account with a medical label on it. Plenty of people deliberately pay small medical costs out of pocket and leave the HSA alone to grow, precisely because it is one of the few places money can sit and never get taxed.
You are under no obligation to use it that way. But knowing it is an option changes the decision, because you are no longer just comparing this year’s premiums against this year’s deductible.
Which brings us to the practical side of having one as a self-employed person.
Does Being Self-Employed Change The HSA Math?
It helps, mostly.
If you were employed, your employer picked the plan, and you took what was on offer. Running your own practice, you choose, which means the HDHP-versus-traditional decision is genuinely yours to make rather than something handed to you.
The contribution comes off your taxable income, which matters more when you are paying self-employment tax on your profit. And because you are already thinking about quarterly payments and deductions, an HSA fits into a conversation you are having anyway rather than being a separate errand.
HSA contributions reduce your taxable income for the year, which in turn affects what you owe each quarter in estimated payments. That is worth factoring into your quarterly planning, not just at tax time.
How To Decide On A High-Deductible Plan
Three things, in this order.
Pull your last two years of medical spending. Not what you think you spent. What you actually spent, including prescriptions and the appointments you forgot about.
Then get the real premium difference between the two plans you are choosing between, annualised. Monthly numbers make small gaps look trivial, and they are not.
Then ask whether you could comfortably cover the higher deductible if the worst version of the year happened. If the answer is no, the tax benefit does not matter, because the plan is a risk you cannot carry.
If it is yes and your healthcare use is genuinely light, the HSA is usually worth it, and it gets more worth it the longer you keep it.
None of this needs to be a big project. It is one hour with two years of statements and a plan comparison, once a year, and you can stop wondering about it.
You also do not have to get it right permanently. Open enrolment comes round every year, and switching back is allowed if the plan stops suiting you. The decision is annual, not a commitment.
If you want a second pair of eyes on the numbers before open enrolment closes, let’s chat.
TL;DR:
An HSA gives you three tax breaks at once, but only with a high-deductible plan. It comes down to how much healthcare you actually use, and the money never expires, which makes it better over years than in any single one.
