Health Savings Accounts
HSA is a tax-free account that can be used by employees to pay for qualified medical expenses. Contributions do not have to be spent the year they are deposited.
Money in the account earns interest and accumulates tax free, so the funds can be used now and in the future.
If an employee leaves the job, he or she can take the account with him or her and continue to use it to pay for qualified healthcare expenses.
To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance (does not apply to specific injury insurance and accident, disability, dental care, vision care, long-term care), is not eligible for Medicare and can’t be claimed as a dependent on someone else’s tax return.