Health savings account
Health Savings Account (HSA)
Health Savings Account (HSA) (/ˈhɛlθ ˈseɪvɪŋz əˈkaʊnt/), is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.
Etymology
The term "Health Savings Account" originates from the United States where it was established by the Medicare Prescription Drug, Improvement, and Modernization Act in 2003. The term directly reflects its purpose - a savings account for health-related expenses.
Definition
A Health Savings Account is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High-Deductible Health Plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike a Flexible Spending Account (FSA), HSA funds roll over and accumulate year to year if they are not spent.
Related Terms
- High-Deductible Health Plan (HDHP): A health insurance plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an HDHP is also a requirement for having a health savings account.
- Flexible Spending Account (FSA): A special account you put money into that you use to pay for certain out-of-pocket health care costs.
- Medicare: A national health insurance program in the United States, begun in 1966 under the Social Security Administration and now administered by the Centers for Medicare and Medicaid Services.
- Medicaid: A joint federal and state program that helps with medical costs for some people with limited income and resources.
See Also
External links
- Medical encyclopedia article on Health savings account
- Wikipedia's article - Health savings account
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