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Your Internet Resource for HSA Information

What is a Health Savings Account?

A Health Savings Account (HSA) is a tax-free savings account that is used in conjunction with a High-Deductible Health Plan (HDHP). With an HSA, you save money by purchasing a high-deductible insurance plan with lower premiums (in some cases, premiums can be up to 50% less than the typical low-deductible insurance plans).

Your HSA pays for qualified and routine healthcare expenses with tax-free money until you've met the deductible; then your insurance coverage takes over.

How is an HSA Different from an MSA?

Health Savings Accounts are similar to the Archer Medical Savings Accounts (MSA) that were introduced in 1997. However, HSAs are not saddled with the restrictions or limitations that limited the availability and use of MSAs.

Unlike MSAs:

• HSAs are not limited to the self-employed or businesses with 50 or fewer employees.
  
  
• Anyone under the age of 65 with an eligible HDHP is eligible for an HSA.
  
  
• HSAs allow employees to contribute 100% of their deductible, eliminating post-tax expense.
  
  
• Both the employer and the employee can contribute to an HSA.
  
  

For a comparison chart of HSAs and MSAs, click here.