How Health Savings Accounts Work
Contributions and Tax Benefits
Health savings accounts (HSAs) were created by Public Law 108-173, the Medicare Prescription Drug, Improvement and Modernization Act of 2003, signed into law by President George W. Bush on December 8, 2003. HSAs are designed to help individuals save for qualified medical and retiree health expenses on a tax-advantaged basis.Any adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may establish an HSA. Tax-advantaged contributions can be made in three ways: The individual or family can make tax-deductible contributions to the HSA even if they do not itemize deductions. The individual’s employer can make…
