what is a hsa medical plan

A Health Savings Account (HSA) is a type of savings account that allows individuals to set aside money on a pre-tax basis to pay for qualified medical expenses. An HSA can be used to pay for qualified medical expenses at any time, but individuals may only contribute to an HSA if they have a High Deductible Health Plan (HDHP) . An HDHP is a type of health plan that only covers preventive services before the deductible. For plan year 2022, the minimum deductible for an HDHP is $1,400 for an individual and $2,800 for a family. If an individual enrolls in an HDHP and combines it with an HSA, they can pay the deductible and other qualified medical expenses using money they set aside in their tax-free HSA. The HSA balance rolls over year to year, so individuals can build up reserves to pay for health care items and services they need later. Some benefits of having an HSA include lower monthly premiums, tax-free contributions, and tax-free interest or other earnings. However, its important to note that not all high-deductible health plans are qualified, and the IRS defines what makes a plan qualified.