What is the primary use of a Health Savings Account (HSA)?

A Health Savings Account (HSA) is specifically designed to help individuals save money for qualified medical expenses. Contributions to an HSA can be made pre-tax, which reduces taxable income, and the funds can grow tax-free over time. When used for eligible medical expenses—such as doctor visits, prescription medications, and other health-related costs—the withdrawals are also tax-free.

This account serves as a crucial tool for individuals to manage healthcare costs, especially for those with high-deductible health plans. The intention behind HSAs is to encourage saving for medical expenses and to provide a financial means to handle these costs conveniently. While HSAs can indeed provide benefits related to retirement savings (such as after age 65 when funds can be used for non-medical expenses without penalty), their primary intended use is for paying for health care expenses. Therefore, the focus on managing and paying health-related costs accurately represents the core purpose of an HSA.