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Health Savings Account

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a form of savings account that is linked to a high deductible health plan that qualifies for the HSA (HDHP - high deductible health plan). Employees can benefit from Health Savings Plans, much as they can from 401K and Flexible Spending Accounts (FSA). Instead of being a direct deduction like FSA funds, the money workers put into HSA accounts decreases their taxable revenue. Employees may afterward utilize the funds for eligible medical bills without incurring any tax consequences.

Related: Health Maintenance Organization (HMO), Health Reimbursement Account (HRA)