What is a Health Savings Account (HSA)?

The health savings account (HSA) is a health care option accessible to individuals who are enrolled in a high-deductible health plan. An HSA is a personal savings account designed to help you pay for medical expenses not covered by your health plan. It is also a tax-advantaged account.

The Advantage of Using an HSA

HSAs are a great option for individuals seeking more flexibility and control when it comes to managing their health care cost. The money in an HSA is tax-advantaged, meaning that the money deposited into an HSA goes in before taxes are taken out and the money used to pay for qualified medical expenses is withdrawn tax-free. HSAs also have some features that can make them more attractive than other savings accounts, such as the ability to invest the money.

HSA Eligibility Requirements

Eligibility for an HSA includes enrollment in a high-deductible health plan (HDHP). An HDHP is a health insurance plan that has a higher deductible but lower monthly premiums than traditional health insurance plans. Additionally, the individual must be under the age of 65 and not enrolled in Medicare or another health insurance plan.

To maximize the benefit of an HSA, it’s important to understand eligibility requirements and to make sure you are taking advantage of all the tax benefits available. Additionally, it is important to make sure that you are taking full advantage of the funds to pay for qualified medical expenses. By utilizing the benefits of an HSA, you can save money and take control of your health care expenses.