Health Savings Accounts — often referred to as HSAs — are a tax-favored way to fund current and future qualified medical, dental, and vision expenses. The HSA can only be opened by someone who is covered under a qualified High Deductible Health Plan (HDHP).
The account owner can contribute up to the annual maximum limit every year and deduct that amount from their income when they file taxes for that year (if post-tax contributions are made). Withdrawals that are used to pay for any qualified expenses that were incurred by the account owner and/or any of their tax dependents (it does not matter if they are covered under the account owner’s QHDP or not!) after the account is established are tax free!
The best feature of an HSA: the money in the account is your money, and does not fall under the "use it or lose it" category. The money in the account also rolls over from year to year.
This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.