First of all, what is a Health Savings Account or HSA? It’s a consumer-driven health plan that is an alternative to standard health insurance coverage. The HSA is a tool that offers consumers a very manageable way to take control of their health investments. The general assumption is that a financial tool with this much potential must be complex and difficult to understand. However, HSAs are simple to outline, and can be broken down into a list of ten basic points.
- HSAs fund health care needs
The HSA is designed to fund health care expenses in conjunction with a high deductible health plan (HDHP). An HDHP is a requirement to set up an HSA. The HSA is a savings account that secures pre-tax dollars in a fund for future medical needs, and helps meet the deductible on one’s health insurance plan, should something happen that takes medical expenses beyond what is readily affordable.