What is HSA and How Does it Work - A Comprehensive Guide

Health Savings Account (HSA) is a great way to save for medical expenses tax-free. It works by allowing individuals to set aside pre-tax dollars into a dedicated account to cover qualified healthcare costs.

Here's how HSA works:

• Employee and/or employer contributes funds into the HSA account on a pre-tax basis.
• These funds can be used to pay for qualified medical expenses such as doctor visits, prescriptions, and more.
• Any unused funds roll over from year to year, allowing for long-term savings and growth.
• HSA funds can also be invested, further growing the balance tax-free.

Overall, HSA provides a tax-advantaged way to save for healthcare costs both now and in the future.

A Health Savings Account (HSA) is not just a smart financial move; it's a strategic way for individuals to prepare for medical expenses without sudden financial burdens. By contributing pre-tax dollars, you can effectively lower your taxable income while setting aside money specifically for health-related costs.