An HSA is a federal tax-exempt savings account set up at a financial institution to save money exclusively for payment of qualified medical expenses.

Anyone who has an HDHP that meets government requirements may open an HSA. 

What is a HDHP?

HDHP's must meet federal guidelines.  Both deductible and out-of-pocket maximum amounts are determined by the federal government.  These amounts follow the Department of Labor's Consumer Price Index and may change annually.

Those with family coverage meet a family deductible, and eligible expenses for all family members contribute to the deductible.  When the family calendar-year deductible is met by any combination of family members, the insurance plan pays eligible benefits for the entire family.

HDHP's also have maximum limits on the annual out-of-pocket amounts for covered expenses.  The amounts paid to meet the deductible are applied to the maximum out-of-pocket amounts.

The money you contribute to an HSA is Tax-Deductible up to the amount of the policy deductible, even if you don't itemize.  Next, the interest and investment earnings are not taxable, so the money in your HSA grows tax-free.  Finally, you can take tax-free distributions to pay for qualified medical expenses.

To view qualified HSA expenses, go to http://www.americanhealthvalue.com and click on "Qualified Expenses" on the left.