Originally called “Medical Savings Accounts,” Health Savings Accounts (HSA) are the hot topic in health insurance. A consumer driven healthcare product, an HSA offers a high deductible health plan combined with a tax-advantaged savings account. With higher out of pocket costs, employees have more direct responsibility for healthcare expenses. Employers save money on premiums and can elect to contribute this savings to their employee’s HSA. Employees can contribute up to a certain percentage of their deductible into their HSA account. Unused money in the tax-advantaged savings account can be rolled over, accumulating over time, or employees can withdraw money from their accounts as needed, for qualified medical expenses.

Health Savings Accounts can work alongside other qualified “cafeteria” plans such as Health Reimbursement Arrangements (HRA) or Flexible Spending Accounts (FSA). When feasible, this creative option provides employers and employees a mechanism to finance higher out of pocket expenses by taking full advantage of IRS incentives.

To learn more about the different types of Health Savings Accounts, please click on one of the links in the side bar.