What Is a Health Savings Account (HSA): Benefits & Usage

By Kristi Waterworth – Updated Jul 2, 2025 at 6:08 PM

Key Points

HSAs are tax-advantaged accounts for covering healthcare costs, including post-retirement medical expenses.
To qualify for an HSA, you must be enrolled in a high-deductible health plan.
Unlike FSAs, HSAs allow investment of funds and rollover of unused contributions each year.

There are many ways to save for retirement beyond the standard 401(k) and IRA. For example, take the oft-underutilized health savings account (HSA). Although it's not meant to be a direct retirement savings vehicle, the benefits it provides to people later in life are immense. Read on to learn more about these accounts.

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Stethoscope and piggy bank next to the letters HSA. — Image source: Getty Images.

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You can also use your HSA to pay for things like qualified long-term care insurance contracts, which can make it easier to pay for long-term care while on Medicare. Medical expenses for service dogs are also covered by your HSA, provided the dog is specifically trained to perform a service for a person with a disability and not simply an emotional support animal.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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