Health savings accounts are designed to do what?

Health savings accounts (HSAs) are specifically designed to help individuals save money for qualified health expenses. Contributions to HSAs are made on a pre-tax basis, providing a tax advantage, and the funds accumulated can be used to pay for a range of medical costs that qualify under the IRS guidelines. This includes expenses such as copayments, deductibles, and certain medications.

The primary purpose of HSAs is to encourage personal savings for healthcare, enabling individuals to manage their out-of-pocket medical costs more effectively. This feature makes HSAs an attractive option, especially for those with high-deductible health plans, as it allows them to set aside money specifically for future healthcare needs, fostering a sense of financial preparedness regarding health expenses.

Moreover, funds in an HSA can roll over from year to year, and they are portable, which means individuals do not lose their savings if they switch jobs or health plans.