–Submitted by Susan Smith, HSA Insurance super fan

Health Savings Account: What is it?

A health savings account (HSA) is a medical savings account for individuals enrolled in a High Deductible Health Plan (HDHP). Monies contributed to an HSA insurance plan are not taxed at the time of deposit. But unlike a flexible spending account (FSA) which returns unspent funds to the employer at the end of the year, HSA funds roll over and continue to accumulate year after year. Heath Savings Accounts are owned by the individual and are used to pay for qualified medical expenses without incurring federal tax liability. Withdrawals for non-medical expenses, on the other hand, are treated similar to those of an IRA…a tax advantage if taken after retirement age but penalties incurred if withdrawn earlier. (more…)