The HSA is designed to help you save for qualified medical expenses on a tax-advantaged basis. It's easy - you contribute money saved on your low premiums to your HSA and let that money grow so you can more easily afford your deductible when needed.
https://www.irs.gov/pub/irs-pdf/p969.pdf
The IRS has established eligibility requirements that you must satisfy to qualify for an HSA. You must meet the following requirements in order to be considered an eligible individual and to qualify for an HSA:
- You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
- You have no other health coverage except what is permitted by law.
- You are not enrolled in Medicare.
- You cannot be claimed as a dependent on someone else's annual tax return.
There are numerous benefits to establishing an HSA
You can claim a tax deduction for contributions you, or someone other than your employer make to your HSA even if you do not itemize your deductions on Form 1040.
Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.
The contributions remain in your account until you use them.
The interest or other earnings on the assets in the account are tax free.
Distributions may be tax free if you pay qualified medical expenses.
An HSA is 'portable'. It stays with you if you change employers or leave the work force.