What Is a Health Savings Account?
A health savings account is designed to save money for healthcare expenses. You may keep pretax money in this account and use it later to cover medical costs, such as copayments or deductibles. Doing this may help you save money as the deposit in a health savings account is not taxed. In general, you may think about this account as an option to get a considerable discount on your healthcare expenses. [1]
How a Health Savings Account Works
A health savings account can be offered by an employer with high-deductible health plans or opened separately if you have a qualifying plan. You may decide the amount of money to deposit into this account each year. However, it should not exceed the maximum amount. After registration, you will get checks or a debit card associated with the account balance. The funds can be used for covering healthcare costs, including coinsurance, copays, deductibles, and other qualified expenses. Keep in mind that you cannot pay insurance premiums with a health savings account. [2]
