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Basics of a Health Savings Account (HSA)

HSA Categories -> Basics of a Health Savings Account (HSA) -> What is a Health Savings Account (HSA)?
QUESTION:

What is a Health Savings Account (HSA)?

ANSWER:

Health Savings Accounts allow qualified individuals to set aside pre-tax money to pay for qualified medical expenses. Money contributed to an HSA is exempt from federal income tax, FICA and state income taxes for most states*. Money in an HSA acts similar to a savings account; it stays there until you use it, and most accounts even earn interest on the savings. HSAs can be a valuable savings tool for those planning for their out-of-pocket medical expenses. HSAs can be used for all medical care costs, including deductibles, co-pays, co-insurance, over-the-counter medical items (drugs require a prescription) and more. View our HSA Eligibility List for a complete listing of HSA eligible expenses.

*Alabama, California and New Jersey do not exclude HSA contributions from state income tax.

 


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