What is a HSA Savings Account? A Comprehensive Guide

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals save for medical expenses. It is owned by the individual and can be used for qualified medical expenses, including deductibles, copayments, coinsurance, and other out-of-pocket costs.

HSAs are only available to individuals who are enrolled in a High Deductible Health Plan (HDHP). Contributions to an HSA can be made by the individual, their employer, or both. The funds contributed to an HSA are not subject to federal income tax at the time of deposit.

Here are some key features of an HSA savings account:

• Tax-deductible contributions
• Tax-free withdrawals for qualified medical expenses
• Interest or other earnings on the account are tax-free
• Unused funds roll over year after year
• Portability, the account moves with you if you change jobs or insurance plans

HSAs offer individuals a way to save for current and future medical expenses while enjoying tax benefits. It's a flexible and cost-effective tool to help manage healthcare costs.

Understanding a Health Savings Account (HSA) can significantly empower your financial decision-making regarding healthcare. An HSA is a unique, tax-advantaged savings account created specifically to help you save for medical expenses, making it a valuable resource in managing your health-related costs.