Pros and Cons of a Health Savings Account

It’s fall and you know what that means. It’s open enrollment season!

With open enrollment comes questions on Health Savings Accounts, or HSAs.

A Health Savings Account is a tax-advantaged way to save money for qualified medical expenses. Funds can be invested and grow for the future.

The biggest benefit of a Health Savings Account is its triple tax advantage. It:

• avoids tax on the front-end,

• grows tax-free, and

• can be withdrawn tax-free if used for qualified medical expenses.

The biggest drawback is that to contribute to an HSA, someone needs to be on a High Deductible Health Plan, or HDHP.