Health Savings Accounts (HSAs)

A health savings account is a tax-favored account that lets people set aside money for medical costs. It is linked to certain kinds of health insurance plans and belongs to the account holder. The topic covers how the accounts work, what they are used for, and how tax law treats contributions and withdrawals. Congress, the Treasury Department, the Internal Revenue Service, employers, and banks all play a part.

People usually ask who can open an account and what it may pay for. They want to know how it differs from other accounts used for medical spending, what happens to the money from year to year, and how changes in tax law affect the accounts.