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9 things an HSA can do

There are many special rules, exceptions and details that make HSA distributions more complicated than its general overview implies.

By Whitney Richard Johnson | Updated on October 28, 2014

As you’re probably aware, a Health Savings Account is a tax-favored account used to pay for qualified medical expenses. HSA contributions are tax-deductible, or potentially pre-tax if made by an employer. It is always used in conjunction with a qualified High-Deductible Health Plan. The HSA is a custodial or trust account which must be opened with an IRS-approved custodian or trustee. From a less technical level, the HSA is a checking, savings or other type of investment account used for medical expenses, just with a lot of additional legal rules and tax benefits. Often, the money is deposited at a bank, credit union or other HSA approved custodian but also can be invested in stocks, bonds, mutual funds and a wide variety of other investment choices.

See also: 2015 HSA and FSA Cheat Sheet

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