California Health Insurance News 
Articles / What is an HSA (Health Savings Account)? How does it work?
07/19/2005
Health Savings Accounts (HSAs) were created by the Medicare bill signed by President Bush on December 8, 2003 and is designed to help individuals save for future qualified medical and retiree health expenses on a tax-favored basis.
You must be covered by a High Deductible Health Plan to be able to take advantage of HSAs. An HDHP generally costs less than traditional health care coverage, so the money that you save on insurance can therefore be put into the Health Savings Account.
A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-advantaged basis.
You own and you control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer, which is one of the major differences between this and other health insurance plans.
"I am always looking for ways for clients to save money without sacrificing coverage and benefits," said David Thau, CEO and founder of Keep It Simple Insurance. "A Health Savings Account has those advantages with several others. Whether you are a young person starting out in life or closer to retirement, this is possibly one of the best insurance innovations to come out in years and has changed the face of California Health Insurance."
