What is an HSA?

An HSA is a tax-free account with money deposited by individuals, employers, or both to spend on routine medical costs. The account is combined with an inexpensive, high-deductible insurance policy to pay for catastrophic medical care in case of major accident or serious illness. HSAs create a financial incentive to spend dollars wisely, because unspent dollars accumulate tax-free in their own personal accounts. Consumers are able to shop around, compare prices and providers, and select the medical services that are best for them.