Health Savings Account (HSA) Eligibility: Who Qualifies and What You Get
Learn if you qualify for an HSA and how this triple-tax-advantaged savings account works for your medical expenses.
A Health Savings Account (HSA) is a way to set aside money specifically for your medical costs while receiving significant tax benefits.
Who it's for
To be eligible to open and contribute to this account, you must be enrolled in a High Deductible Health Plan (HDHP).
What you get
This account offers what is known as a triple-tax advantage. This means you receive tax benefits when you put money into the account, when the money grows through interest or investments, and when you take it out to pay for healthcare.
What it costs you
To use this scheme, you must maintain a specific type of health insurance known as an HDHP. Additionally, there are annual limits on how much money you are allowed to contribute to the account each year.
The catch to know
While you are allowed to invest the funds held within an HSA to potentially grow your savings, you can only use that money to pay for qualified medical expenses.
How to apply
- Verify that your current health insurance plan is a High Deductible Health Plan (HDHP).
- Check with your employer to see if they offer an HSA option.
- Open an account through your insurance provider or a qualified financial institution.