A health savings account is money you set aside in a tax-deductible savings account to help you pay for health care services, like a savings or checking account from a bank.
It works with a high-deductible health plan. You can use the account to pay for eligible expenses until the deductible is reached. It helps you save on health care and save for retirement.
How does it work?
You must have an HSA-eligible, high-deductible health plan that works with the health savings account. The health plan can help you save with a monthly premium that’s generally lower than a plan with a lower deductible.
The deductible is the amount you pay for eligible expenses before your health plan begins to pay. Generally, there’s a financial tradeoff – the premium is lower because the deductible is higher.
That’s where the HSA comes in. You use the pre-tax money you’ve contributed to the HSA to pay for care until you reach your deductible. See how a health plan and HSA work together.
It can save you money on your family’s health care. See an example of tax savings.