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Nevada Health Insurance- What is an HSA (Health Savings Account)




What is an HSA (Health Savings Account)-

The term "HSA" stands for Health Savings Account; HSA plans allow the insured to pay for qualified medical expenses with "pre-tax" dollars (which means tax-free), while also being able to save for retirement on a tax-deferred basis. A Health Savings Account is used in conjunction with a HDHP (High Deductible Health Plan) to try and make healthcare more affordable and give the insured a greater "say-so" in how their medical dollars are spent.

HSA are often known as "medical 401K plans" because of these reasons:
  • Pre-tax dollars are deposited into an account that can easily be withdrawn with no taxes or penalties to pay for "qualified medical expenses"
  • All funds not used each year can remain in the HSA account and earn tax-free interest to help supplement medical expenses for future years
  • Much like an IRA account, the money belongs to you; unlike a typical IRA account, your employer may contribute to your HSA account

Here is a short (very informative) video from Wells Fargo discussing the advantages of HSA's: https://www.wellsfargo.com/investing/hsa/demo

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