Health savings accounts (HSAs) are like personal savings accounts, except that the money in them is used to pay for eligible health expenses. They were created in 2003 to help individuals and families offset the growing costs of healthcare.
At First Dollar, we consider HSAs the crown jewel of tax-deferred accounts. Financial advisors like to describe HSAs as being "triple tax-advantaged" which means:
- Money placed in your HSA are not taxed
- Funds in them grow tax-free
- Distributions for eligible health expenses aren’t taxed, either
Unlike an FSA, your HSA amount remains with you after the year is up, too.