What is a Health Savings Account (HSA)?

An HSA is a tax-exempt trust or custodial account created for the purpose of enabling consumers to save money by paying for qualified medical expenses in connection with a High Deductible Health Plan (HDHP) with pretax dollars. An HSA helps an individual set aside money for current and future qualified health care expenses that aren’t covered by their medical plan.

An HSA is an individually-owned account and is “portable.” This means that the funds are available from year to year and belong to the account holder. This is true even if an individual changes employers or leaves the work force. There is no “use it or lose it,” so the HSA funds stay with the accountholder rather than reverting back to their former employer like a Flexible Spending Account (FSA) and most Health Reimbursement Accounts (HRA). UMB HSAs are custodial accounts consisting of all funds the individual and their employer contributes to the HSA, including all eligible investments the accountholder makes and all earnings on the funds.