A tax-advantaged savings account designed to assist individuals in saving for qualified medical expenses that are not covered by high-deductible health insurance plans. Contributions to an HSA can be made by either the individual or their employer, and they offer potential tax benefits. The annual contribution amount is subject to a maximum limit set by the government. HSAs are linked to high-deductible health plans, and the funds saved in the account can be withdrawn tax-free to cover medical costs, including deductibles, co-payments, prescriptions, and certain medical services. Unused funds can be rolled over to subsequent years, making HSAs a valuable tool for managing healthcare expenses and potentially building a long-term health-related financial cushion.
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