HSAs have become more popular in recent years as a way for people to be more autonomous about their health and financial decisions, says Anne Brunson, vice president of service operations for Maestro Health in Charlotte, North Carolina.
“HSAs present a way for people to save money and prepare for unknown medical expenses in the future, while also saving for retirement — which doesn’t necessarily have to be tied to your health plan,” she says.
You or your employer can make contributions to your HSA. If your employer contributes to the HSA, this money isn’t included in your income.
Income earned on amounts contributed to an HSA is also not taxed. Distributions from an HSA are tax-free if used to pay for or reimburse qualified medical expenses incurred after an HSA is established.