Health Savings Account (HSA)

A special savings account that can be used with certain high-deductible health plans to pay for medical expenses. Contributions to the HSA are tax-deductible,and withdrawals to pay for qualifying medical expenses are tax-free. Money can stay in the account from year to year, and any interest or investment returns accrue tax-free. Penalties may apply when money is used to pay for anything other than qualifying medical expenses.

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