About Health Savings Accounts (HSA)
You put money in a savings account meant to be a reserve for medical expenses.
The government doesn’t touch it. Your money will never be taxed. You can deposit untaxed income that will continue to grow from year to year without the government collecting any of it.
Insurance companies don’t touch it. You no longer have to deal with what the insurance covers or does not cover. You aren't depending on their funds to cover you; you have your own.
You save it and you spend it. The money in your account is yours, after all. You choose to spend your money how and where you want. If you like, you can just keep saving!
So where do the substantial savings come from?
HSAs are completely tax free. You can work with your employer to set up a plan for how much of your income will be transferred to your savings account. The account will accrue tax-free interest that will roll over from year to year. At the risk of sounding repetitive, your HSA money is never taxed in any step of the process. Now let’s translate a paycheck into your potential savings.
Income that would have gone to the IRS goes to your HSA account. From your HSA account, it goes directly to covering all of your medical expenses. In the end, paying less taxes means you have more money in your pocket. That means you get more money now and more money later.