What is an HSA (Health Savings Account)?

A Health Savings Account (HSA) is a tax-advantaged savings account that can be used in conjunction with an HSA-qualified High Deductible Health Plan (HDHP). It allows you to set aside money for eligible medical expenses while enjoying valuable tax benefits.

Contributions to an HSA are generally tax-deductible, earnings grow tax-free, and withdrawals are tax-free when used for qualified medical expenses. Funds can be accessed using a debit card, checks, or other account access methods, depending on the financial institution.

Unlike a Flexible Spending Account (FSA), unused HSA funds roll over from year to year and remain yours even if you change employers or health plans. As your balance grows, you may also have the opportunity to earn interest or invest a portion of your funds, depending on your HSA provider.

Because funds remain in the account year after year and can be used for future healthcare costs, many people view an HSA as a valuable tool for both current medical expenses and long-term financial planning.
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Consult a tax advisor for additional information.