What is an HSA and how can it save money?

An HSA, or Health Savings Account, is a tax-advantaged savings account available to people enrolled in a high-deductible health plan (HDHP). You contribute pre-tax dollars to the account and use the funds to pay for qualified medical expenses like doctor visits, prescriptions, and dental care. It saves money in three key ways. First, contributions reduce your taxable income. Second, the money grows tax-free if invested. Third, withdrawals for qualified medical expenses are also tax-free, making it one of the few triple-tax-advantaged accounts available. Unused funds roll over year to year with no expiration, and after age 65 you can withdraw for any purpose without penalty, making it a useful retirement savings tool as well.