Health Savings Accounts (HSAs) are accounts established to pay for future qualified medical expenses with potential tax benefits. The accounts are intended to assist those who have chosen a health insurance plan with a high deductible.
- How does an HSA work?
- You must have a high deductible health plan
- Open an HSA–a tax-sheltered savings account that you can withdraw from anytime, tax-free, to pay for qualified medical expenses not covered by your health plan
- Individuals or employers can contribute to an HSA up to the annual contribution limit
- Carry over any unused funds from the previous year–no “use it or lose it” stipulations
- Use checks or a debit card to pay medical expenses directly from your HSA
- Earn dividends on any funds in the HSA