Advantages
HSAs offer unique benefits:
- Lower premiums with a HDHP over a traditional HMO or PPO plan
- Flexibility in funding and contributions
- Contributions are 100% tax-deductible
- Tax-free distributions for various medical services and expenses
- Funds grow on a tax-deferred basis
- Funds roll over from year to year, and funds used after age 65 are able to be used tax-free for eligible medical expenses or at the normal tax rate for any other reason
- The HSA is portable and owned by the account holder
- Over the life of an HSA, an account holder could save thousands of dollars in taxes.