What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a type of savings account that can be used to pay for qualified medical expenses. It provides tax advantages when used to save and pay for medical expenses. In California, an HSA is an IRA-like account that can be opened by individuals and families. Funds deposited into HSAs are not taxed, and can be withdrawn to pay for qualified medical expenses. HSAs are often used in conjunction with a high deductible health plan, also known as HDHP. Under an HDHP, the policyholder pays a higher deductible for medical expenses before the insurance policy pays any benefits. The funds saved in an HSA can be used to cover these expenses. Any money not used in a given year rolls over and accrues interest, and can be used to cover future medical expenses. HSAs are a great way to pay for medical expenses while also saving for the future. The funds in an HSA are portable, meaning they remain with the policyholder if they change jobs or insurance companies. However, policyholders should be aware of the specific rules and regulations in their state before opening an HSA. In California, there are restrictions on how and when the money in an HSA can be used.

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What is a Health Savings Account (HSA)?

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