What is hsa and how does it work?

Health Savings Account (HSA) is a versatile tool that offers individuals the opportunity to save money tax-free for qualified medical expenses. It is essentially a personal savings account that allows you to set aside pre-tax income for future medical costs.

Here's how an HSA works:

1. You contribute to your HSA account either through payroll deductions or direct contributions.
2. The funds in your HSA can be used to pay for qualified medical expenses not covered by your insurance plan.
3. Your contributions are tax-deductible, and the interest and earnings on your HSA investments are tax-free.
4. Any unused funds in your HSA at the end of the year roll over to the next year, allowing you to build up savings for future healthcare needs.