Your Compliance Edge

Health Savings Accounts (HSAs)

What is a HSA?

Tax-exempt account that can be used to pay or reimburse employees for certain medical expenses.

What are some advantages of a HSA?

  • HSAs make an employer's benefits package more attractive by helping employees pay out-of-pocket medical expenses in a tax-advantaged way.
  • Employer contributions to employees' HSAs are generally deductible business expenses.
  • All compliant HSA contributions are tax-exempt for the employee.

What expenses can HSA funds be used to pay?

Most medical, dental, vision, and prescription drug expenses, but not most group or individual insurance premiums. Please read IRS Publications 969 and 502 for more information. 

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