An HSA is an individually-owned triple-tax-advantage account that works with a qualifying high-deductible health plan. An individual can open the account on their own, but it’s often offered by an employer. With recurring payroll contributions, up to the maximum annual contribution limit set by the IRS, the account holder can make tax-deductible contributions, earn tax-free interest, and make tax-free withdrawals for qualified medical expenses. The funds can be withdrawn to help pay for qualifying medical expenses, including those not covered by health insurance - like dental and vision care.
Discover more of the details of how an HSA works.
Source: “Revenue Procedure 2020-27.” Internal Revenue Service, 2020. https://www.irs.gov/pub/irs-drop/rp-20-27.pdf.
Source: “Revenue Procedure 2020-30.” Internal Revenue Service, 2020. https://www.irs.gov/pub/irs-drop/rp-20-30.pdf.