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

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What an HSA is and does

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.

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.

Key tax and benefit features of HSAs

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.