What Type of Account is a Health Savings Account (HSA)?

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What an HSA is and what it does

A Health Savings Account, commonly known as an HSA, is a type of savings account that allows individuals to set aside money on a pre-tax basis to pay for qualified medical expenses. It is like a personal savings account but specifically designed to cover healthcare costs.

A Health Savings Account, or HSA, is a fantastic financial tool that allows you to save money tax-free for medical expenses. Think of it as a dedicated savings account just for your healthcare needs!

Key HSA features and tax advantages

Here are some key features of an HSA:

• Contributions are tax-deductible
• There is no income tax on interest or investment earnings
• Funds roll over and accumulate year over year
• It is portable, meaning it stays with you even if you change jobs or insurance plans
• Can be used to pay for qualified medical expenses for you, your spouse, and dependents

Contributions to an HSA can be made by both the individual and their employer, and the funds in the account can be invested to potentially grow over time.