It’s benefits open enrollment season at many employers, and workers are increasingly likely to hear about an option, known as an H.S.A., that can help them pay for medical expenses and save money on their taxes.
H.S.A.s, or health savings accounts, are not yet as familiar as their better-known cousin, the F.S.A., flexible spending account. But H.S.A.s are becoming more common, according to the latest data.
Devenir, an H.S.A. services firm, reports that the number of H.S.A. accounts increased by 16 percent year over year as of June 30, to more than 21 million. Assets held in the accounts grew 23 percent, to just under $43 billion. (Devenir’s data comes from a survey of 100 H.S.A. providers.)
H.S.A.s offer a triple tax benefit. Contributions can be deducted pretax from your paycheck, lowering your taxable income; any interest or investment gains on the money is tax free; and withdrawals from the account are tax free, as long you spend the money on eligible items.
And if you change jobs, the H.S.A. moves with you.
