IRA Financial offers one of the country’s only “Checkbook Control” Self-Directed Health Savings Accounts (HSAs), giving you the freedom to invest in what you know, such as real estate, notes, private businesses, options, and even cryptocurrencies.
What is an HSA?
A Health Savings Account (HSA) is a tax-advantaged savings account for medical expenses. The IRS created HSAs to allow qualifying taxpayers to receive tax benefits for medical expenses, regardless of whether they itemize deductions.
Before you can open an HSA, you must first have a qualifying High-Deductible Health Plan (HDHP). You can keep the HSA indefinitely, even if you leave your job or change your insurance plan. Contributions, earnings, and qualified withdrawals are all tax-free.
What is a High Deductible Health Plan?
You must have a High-Deductible Health Plan (HDHP) before you can open an HSA. An HDHP is a category of health insurance plans available from your health insurance provider. One primary benefit of the HDHP is that it offers lower monthly premiums and a higher yearly deductible than most health plans. Additionally, it has a maximum limit on the sum of the annual deductible and out-of-pocket medical expenses you pay.
There are two types of HDHP plans that you can set up. You have the option of choosing the self-directed plan, which covers one person, or a family coverage plan for multiple persons.
Does your Plan Qualify as a HDHP?
To qualify as a HDHP eligible for Health Savings Account contributions in 2026, your health plan must meet IRS‑defined minimum deductible standards:
| Plan Type | Minimum Deductible | Maximum Out-of-Pocket |
|---|
| Self-Only | $1,700 | $8,500 |
| Family | $3,400 | $17,000 |
These thresholds are the minimum annual deductible amounts required for an HSA‑eligible HDHP. In addition to the deductible requirement, HDHPs must stay within IRS maximum out‑of‑pocket limits (for 2026, $8,500 for self‑only and $17,000 for family plans).
To be eligible to contribute to an HSA, you must:
- Be enrolled in an HSA‑eligible HDHP
- Not be enrolled in Medicare
- Not be claimed as someone else’s dependent on their tax return
Qualified HDHPs generally lower monthly premiums and provide protection against significant medical expenses once your deductible is met.
Self-Only Plan vs Family Coverage
If you are married, you and your spouse can establish family plan coverage. If you already have a family coverage but your spouse has self-only coverage, he/she is allowed to use the family coverage. If you both have an HSA, you can contribute up to the family limit together, not separately. In other words, you cannot each contribute up to the family limit.
If you are married with a self-only plan, you can both contribute up to the self-only limit to your respective HSA.
With a family plan, if each person has a deductible, you can contribute only up to the family limit.
2026 HSA Contribution Limits
The IRS limits how much you can contribute to your HSA each year:
| Coverage Type | Contribution Limit (under 55) | Catch-Up Contribution (55 or older) |
|---|---|---|
| Self-Only | $4,400 | +$1,000 → $5,400 |
| Family | $8,750 | +$1,000 → $9,750 |
Catch-up contributions are allowed for individuals age 55 and older. Contributions include any combination of personal and employer contributions.
How does an HSA work?
How Does an HSA Work?
An HSA works like a personal savings and investment account for healthcare:
- Contributions are tax-free
- Funds grow tax-deferred
- Withdrawals for qualified medical expenses are tax-free
IRA Financial’s Self-Directed HSA allows you to invest in both traditional and alternative assets, including real estate, private businesses, notes, options, and cryptocurrencies.
Benefits of using an HSA
There are numerous benefits of HSA plans compared to regular health insurance. You save money each month because the premiums are lower, and you are still insured against catastrophe. Your HSA savings account is highly tax advantaged as the funds grow tax-deferred. The HSA is also a great savings plan that can be used for medical expenses, emergencies, job loss, or retirement.
Below are some of the main benefits of establishing an HSA:
- Ability to claim a deduction for contributions you make that are not pretax or made by your employer, even if you don’t itemize your deductions on Schedule A.
- NEVER taxed when used for qualified medical expenses.
- Contributions made on your behalf by your employer, including any pretax contributions you make through a cafeteria plan, are generally not taxable.
- Unused contributions remain in your account from year to year.
- Interest, income, and gains earned on the account is usually tax-free.
- Distributions used to pay for qualified medical expenses are tax-free.
- Your account stays with you even if you leave your employer.
Withdrawing Funds from an HSA
- Qualified medical expenses: Tax-free
- Non-qualified expenses: Subject to income tax plus 20% penalty if under age 65
How to set up an HSA?
Establish a self-directed health savings account with IRA Financial. Remember, one can open an HSA if you have a qualifying high deductible health plan. One can contribute to the plan annually on a tax-free basis through your employer, or you contribute on your own and receive a tax deduction on Form 1040, line 25. As you need the funds to pay medical expenses, you receive distributions from the account.
Taking a distribution is quick and easy. As long as the distributions are used to pay medical expenses, there is no tax effect. Simply complete an HSA Distribution Request form and the distribution will be sent to you ASAP. The beauty of the plan is that you get the tax benefit up-front when you contribute to the plan. Any unused funds carry over from year-to-year until you need them.
Advantages of a Self-Directed HSA
- Used to meet your deductible.
- Tax deductible off of gross income.
- Grow tax-deferred.
- Self-directed options – real estate, notes, private business, options, cryptocurrencies & more.
- Roll over year after year – no “use it or lose it”.
- Portable, goes with you wherever you go.
- Health insurance premiums when you’re between jobs.
- Qualified long-term care premiums.
- Medicare premiums and out-of-pocket expenses.
- Living expenses after age 65 (pay ordinary income taxes).
- The ability to invest in traditional and alternative investments.
What Investments are Prohibited with an HSA?
If you choose to self-direct your HSA, the Internal Revenue Code (IRC) does not state what you can invest in with a Self-Directed IRA or Solo 401(k) plan. However, it does describe what you cannot invest in, which are few. Under IRC section 408 & 4975, the IRC states you cannot engage in certain types of transactions with a disqualified person, which includes you, the account holder. Disqualified transactions include investing in life insurance or collectibles or engagement directly or indirectly with a disqualified person.
Can I get Checkbook Control with an HSA?
When you self-direct your HSA, you have the ability to choose from a custodian-controlled account or an account with checkbook control. If you choose the latter, you will have control over the funds within your Health Savings Account, and the freedom to invest without the consent of a custodian.
Under the checkbook control format, the HSA is set up as a self-directed account that’s capitalized by funds rolled over from your current retirement account. A limited liability company (LLC) is created in which your new HSA purchases all the membership units/interests. Now, your money is held in an LLC and you are ready to invest at your discretion. In order to make an investment, you simply need to write a check, use a debit card or wire funds from the HSA LLC bank account.
With a Self-Directed Health Savings Account, when you find an investment that you want to make with your HSA funds, simply write a check or wire the funds straight from your Self-Directed Health Savings Account LLC bank account to make the investment.
Get in Touch
If you have questions about the Self-Directed Health Savings account that were not answered in this article, call IRA Financial at 800-472-1043 or schedule a consultation with one of our specialists. Our team can help you maximize your HSA contributions and investment opportunities for 2026 and beyond.
About the Author
Adam Bergman is a tax attorney and the founder of IRA Financial, one of the largest Self-Directed IRA platforms in the United States. He has helped more than 27,000 clients take control of their retirement savings, overseeing over $5 billion in retirement assets. Adam is also the author of nine books focused on helping investors understand and confidently manage their retirement strategies.
