July 15 | The Doctor’s CPA

Health Savings Accounts (HSA) offer key financial benefits for locum tenens physicians and APPs, especially when paired with a high-deductible health plan (HDHP). These accounts provide triple tax advantages: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. Unlike FSAs, HSAs are individually owned, portable, and do not expire at the end of each year. After age 65, funds can be used for non-medical expenses without penalty; however, taxes still apply. For providers with variable income or multiple contracts, HSAs offer long-term flexibility and savings potential.

In 2025, the IRS allows contributions of up to $4,300 for individuals and $8,550 for families, with an extra $1,000 for those 55 and older. Eligible expenses include prescriptions, dental and vision care, mental health services, and medical devices. HDHPs often have lower premiums, making them a practical option for independent clinicians. Selecting a plan should involve reviewing personal health needs and consulting a tax advisor familiar with locum work.

HSAs can also serve as investment tools, offering growth potential alongside other retirement accounts, such as Solo 401(k)s or SEP IRAs. For locums seeking to minimize tax burdens and establish long-term financial security, incorporating an HSA into their strategy is a wise move.