A Health Savings Account (HSA) allows you to save your money for current or medical expenses that are not covered by your health insurance. A HSA is an account for people who have a high deductible health plan (HDHP). The HSA plan allows you to save money tax-free to pay for IRS-qualified medical expenses that the HDHP does not cover. After a year of saving the money is yours to keep without any “use it or lose it” penalties. You may also earn investments on you HSA money, which will not be taxed, as long as it stays in the HSA account.
If you have an HDHP, a valid social security number and a primary residence in the U.S., are not covered by any other health plan, including Medicare, and are not claimed as a dependent on another person’s tax return (except your spouse), you can open a HSA.