|Health Savings Accounts (HSAs) are tax-advantaged personal savings accounts that may be established in combination with HSA eligible high-deductible health plans. HSAs were approved with the passage of the Medicare Prescription Drug, Improvement and Modernization Act of December 31, 2003.
HSAs are available to all market segments, including individual and family plans, and small, midsize and large groups. Almost everyone with an HSA-eligible high-deductible health plan can get an HSA.
Funds in HSAs may be accumulated over the years and may be distributed on a tax-free basis to pay for, or reimburse, qualified medical expenses. The remaining covered medical expenses are then paid as indicated by the has-eligible high-deductible health plan.
Clients should be advised to contact their financial or tax advisors for more detailed information on HSAs, including information about how to establish a new HSA or how to replace an existing MSA.