Health Savings Account (HSA)
A Health Savings Account combines high deductible/lower premium health insurance with a tax favored savings account set up to help employees manage the increase in out-of-pocket healthcare expenses usually associated with a high deductible plan. Both employer and employee can contribute, tax-free, to the savings account.
Money in the savings account can help pay the deductible and other qualified medical expenses, tax free. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest, tax free and is the employees to keep forever, even when they change jobs or medical plans.