What is HSA Now? Understanding the Basics of Health Savings Accounts

Health Savings Accounts (HSAs) have become increasingly popular among individuals looking for ways to save money on healthcare costs. An HSA is a savings account that allows you to set aside pre-tax income to pay for qualified medical expenses. But what exactly is an HSA now, and how does it work?

One of the key benefits of an HSA is that the funds you contribute are not subject to federal income tax when used for qualified medical expenses. This makes HSAs a tax-efficient way to save for healthcare costs both now and in the future. Additionally, any unused funds in your HSA can be rolled over from year to year, unlike a Flexible Spending Account (FSA) which typically has a 'use it or lose it' rule.

Here are some key features and benefits of Health Savings Accounts:

• Contributions are tax-deductible
• Withdrawals for qualified medical expenses are tax-free
• Interest and investment earnings are tax-free
• Funds roll over from year to year
• Portability - you can take your HSA with you if you change jobs

Health Savings Accounts (HSAs) serve as a fantastic financial tool for individuals aiming to manage healthcare costs effectively. With HSAs, you can save pre-tax dollars specifically earmarked for qualified medical expenses, providing a tax advantage that is hard to overlook.