Health Savings Accounts

A Health Savings Account, or HSA, is a tax-exempt trust or custodial account your employees can set up with a qualified HSA trustee to pay or reimburse employees for qualified medical expenses on a tax-free basis. Various programs, such as HSAs, are designed to give individuals tax advantages to offset health care costs.

A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for people to pay for their health care. HSAs enable employees to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

An employee must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs less than what traditional health care coverage costs, so the money that is saved on insurance can therefore be put into the Health Savings Account.