What is the primary benefit of having a Health Savings Account?

The primary benefit of having a Health Savings Account (HSA) is that both employees and employers can contribute pretax dollars. This feature allows individuals to save on their taxable income, as contributions made to an HSA are deducted from gross income, reducing the overall tax burden. This pretax contribution model encourages saving for qualified medical expenses, making healthcare expenses more manageable for individuals and families.

Other aspects further reinforce the advantages of HSAs, such as the potential for tax-free growth of the account balance and tax-free withdrawals for qualified medical expenses, thus enhancing the financial flexibility of account holders in managing their healthcare costs.