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On top of trying to understand all of it, the letters HSA keep popping up to add to the madness. So what exactly is a HSA? We’re here to help simplify it for you!

What is an HSA?

An HSA stands for a Health Savings Account. This type of savings account can be used to pay for medical expenses such as prescriptions and doctor bills. The money is NOT taxed by the federal or state government, excluding Alabama, California, and New Jersey. This account also earns interest!


Unlike normal savings accounts where you are the sole contributor, your employer, parents, family members, and others can contribute to your HSA account. None of these contributions are taxed on a federal or state level.  

How does a HSA benefit me?

Since HSAs can only be used for qualifying medical expenses, having an HSA account allows you to save up for any unexpected illness or injury for years to come that you may not be able to afford out of pocket. The money stays in your account until you use it, unlike a Flexible Spending (FSA) account, where you lose the money if you don’t use it up by the end of the year.  If you do try to take money out of your HSA account, or use it for non-qualifying purchases, you will most likely be charged a penalty.

Am I eligible for an HSA?

You are eligible for an HSA if you are enrolled in a high deductible health insurance plan, which is shortened to HDHP. HDHPs have higher than average deductibles making it more difficult to meet your out of pocket minimum before receiving benefits. However, you do pay lower premiums with these plans. You do not qualify for an HSA if you are enrolled in another non-HDHP plan or in Medicare, or if someone is claiming you as a dependent on their taxes.

How do I set up my HSA?

Contact your HDHP insurance company for recommendations. You may also find a bank or credit union on your own. After you find a bank or credit union that allows you to set up an HSA, all you have to do is apply and make a deposit into the account.

What does my HSA cover?

A HSA should be used for qualified expenses only, which include expenses used to treat or prevent illness. To view a full list of qualified expenses visit the IRS’ official HSA qualified definition list.

We know health insurance and billing can be quite confusing, if you have questions about your health insurance coverage, we’re happy to help! Just walk in or schedule an appointment online at your local Our Urgent Care and we’ll help answer any insurance questions you have.