In this episode, Tom Quigley breaks down one of the most misunderstood acronyms in healthcare — the HSA (Health Savings Account) — and explains why it may be the single smartest way for individuals and certain business owners to fund healthcare in 2026 and beyond.

Most people think HSAs are confusing, restrictive, or not worth the effort. Tom flips that narrative completely, walking listeners through what an HSA actually is, how it works, who should use it, who shouldn’t, and why it’s one of the most tax-advantaged tools the government has ever created.

This is an educational episode — but make no mistake — it’s also strategic. If you don’t understand HSAs, you’re likely overpaying for healthcare and missing major tax advantages.

Tom starts at square one:

• An HSA is a personal health savings account

• It can only be used if you have a qualified high-deductible health plan

• Money goes in pre-tax

• Money comes out tax-free for eligible medical expenses

• The account is owned by the individual

• Funds roll over every year

• The account can earn interest or investment returns

If funds are used later for non-medical purposes, they’re taxed — effectively turning the HSA into an IRA-like account in retirement.

Setting up an HSA is surprisingly simple:

• Open an account online (ex: HSA Bank or similar providers)

• Receive a debit card

• Use the card for eligible medical expenses

• Contributions can be made:

  • All at once

  • Gradually throughout the year

Tom:

“You can literally do it in two minutes.”

Tom draws a critical distinction here:

• Individuals:
  HSAs make a lot of sense.

• Employers funding HSAs:
  Usually a mistake.

Why?

• Once employers put money into an employee’s HSA, the money is gone forever

• Employers lose all control

• This is why ClaimLinx prefers Medical Expense Reimbursement Plans (MERPs) for employers

Tom:

“Once the money goes into the HSA, it’s their money. No control. No clawback.”

Approximate 2026 limits discussed:

• Single: ~$4,400

• Family: ~$8,750

• Catch-up (age 55+): +$1,000

(Exact limits can be confirmed by searching “2026 HSA contribution limits.”)

HSAs only work with high-deductible health plans, which means:

• No copays

• No coverage until deductible is met (except preventive care)

• Everything applies toward the deductible

Tom explains:

“Copays don’t exist in these plans — and that’s actually the advantage.”

HSAs are designed to replace copays, not supplement them.

A major misconception cleared up:

• HSA funds can be used to pay deductibles

• You just can’t “double dip”

• You use HSA money to cover expenses before insurance kicks in

Even better:

• If you don’t have money in the HSA yet, you can deposit funds before paying the bill and still get the tax advantage

Tom shares how savvy users treat HSAs:

• Max out contributions every year

• Pay medical expenses out of pocket

• Save receipts

• Let the HSA grow

• Withdraw tax-free later in retirement

There is no time limit on reimbursement.

Tom:

“You could pull out $20,000 tax-free ten years later if you saved the receipts.”

Tom clarifies confusion with FSAs (Flexible Spending Accounts):

• FSAs = “use it or lose it”

• HSAs = your money forever

If you were thinking you needed to predict expenses precisely — that’s an FSA mindset, not an HSA one.

Tom strongly recommends HSAs for:

• Owners of:

  • S-Corps

  • LLCs

• Anyone with 2%+ ownership

• People not eligible for Section 125 plans

• Individuals comfortable with higher deductibles

• People focused on tax efficiency

HSAs are also a great option for employees who understand them — alongside a Medical Expense Reimbursement Plan.

Tom explains why copays persist:

• They condition people psychologically

• They increase premiums

• They increase agent commissions

• They make insurance more expensive overall

Tom:

“Copays make zero sense — they exist to raise premiums.”

HSA dollars can be used for many non-traditional medical expenses, as long as they’re eligible under IRS Publication 502.

Examples: