Health Savings Account
With a Health Savings Account (HSA), the account holder makes pre-tax contributions that are then used to pay for qualified health care expenses that are not covered by insurance. It can also be used for out-of-pocket medical expenses such as your deductible. It is only available to those who are enrolled in a high-deductible health plan. The account can build value over time and amounts contributed rollover from year-to-year. The value in the account remains the property of the account holder and can continue to be used for health care-related expenses, even if contributions to the account are stopped.
The account holder is required to maintain a record of expenses related to the account and may be required to provide proof that an expense was qualified. There are penalties associated with using the account for non-qualified purposes. You may speak with an agent to learn more about HSAs and find out if this is the right choice for you.