A type of savings account that lets people put aside funds on a pre-tax basis to pay for qualified medical expenses. By using non-taxable dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, people may be able to lower their overall health care costs. Generally, HSA funds may not be used to pay premiums.
While people can use the funds in an HSA at any time to pay for qualified medical expenses, they may contribute to an HSA only if they have a High Deductible Health Plan (HDHP) — a health plan (including a Marketplace plan) that only covers preventive services before the deductible.