We love the HSA. Not only is it a triple tax-advantaged savings account, it is not a "use it or lose it" account, either. An HSA is YOUR money.
1) You put in money in tax-free1. If your employer works with an HSA provider, this will be taken out as a pre-tax deduction every pay check. If you are funding as an individual, you fund the account with your post-tax dollars and at the end of the year, you will get a tax form showing the total amount of contributions that you can deduct from your taxes.
2) You can earn interest on your money or even invest it. Any gains you make are tax-free.2
3) You can withdraw your money at any point tax-free3, so long as it is used for qualified medical expenses. See our abbreviated version of qualified medical expenses for more information or go directly to the source.
4) There is no “use it or lose it” feature 4 . It's portable, meaning you can take it with you if you leave your job and it doesn't have to spent in the year you contribute to it. It's your money and it stays in your HSA until you spend it, unless you have monthly fees. First Dollar does not charge monthly fees, though.
1: IRC Sec. 223(a). IRS Notice 2004-2 Q&A 11)
2:IRS Notice 2004-2 Q&A 20 .Publication 969 (2018), Health Savings Accounts and Other Tax-Favored Health Plans.
3:IRC Sec. 223(f)(1)
4:IRC Sec. 223(d)(1)(E))