What is HSA? All You Need to Know About Health Savings Accounts

Health Savings Account (HSA) is a tax-advantaged financial account that allows individuals to save money for medical expenses tax-free. An HSA is designed to work alongside a High Deductible Health Plan (HDHP), providing a way for individuals to cover out-of-pocket costs not covered by insurance.

Here are some key points to know about HSAs:

• Contributions to an HSA are tax-deductible, reducing your taxable income.
• Money in an HSA grows tax-free through investments like stocks, bonds, and mutual funds.
• Withdrawals from an HSA for qualified medical expenses are tax-free.
• Unused funds in an HSA roll over year after year, unlike a Flexible Spending Account (FSA).
• HSAs are portable, meaning the account stays with you even if you change jobs or health plans.

Health Savings Accounts (HSAs) not only allow you to save for immediate medical expenses, but they also serve as an essential tool for long-term financial planning, helping you secure your health in the future.