This document explains the basic rules for how a Health Savings Account (HSA) works. An HSA is a special savings account that helps you save money for medical expenses – and the money you put in, grow, and use for qualified healthcare costs is tax-free. To open an HSA, you need to be enrolled in a High Deductible Health Plan (HDHP) and meet other eligibility rules, like not being on Medicare or claimed as someone else’s dependent.
The document also explains how much you can contribute, what happens if you put in too much, and how rollovers from other accounts work. It covers what counts as a qualified medical expense (like doctor visits, prescriptions, and some insurance premiums) and what happens if you use the money for something that’s not allowed – you’ll have to pay taxes and possibly a penalty. It also talks about what happens to your HSA if you pass away, and how to report your HSA activity on your taxes. This guide helps you understand your rights and responsibilities so you can use your HSA wisely.