What is a health savings account?

Who is this for?

Michigan Health Insurance – Customer Service – Health Spending Accounts

If you’re interested in health savings accounts, this information can help you understand more about them and how to use them.

A health savings account, or HSA, is a kind of health spending account. You can only pair it with a qualifying health plan. Most people put money into their HSA by having it deposited from their paycheck before taxes.

You can also deposit post-tax money in your HSA and deduct your contributions from your income tax. Then, when you have a medical expense, you can use the money in your account. Read How do HSAs work? to learn all the various ways an HSA can get funded.

HSAs work with your insurance to help you cover your part of medical expenses. You can also use it to cover some spouse and dependent expenses, even if they aren’t on your plan. Read How can I use my HSA? to find out more about what they cover.

What are the advantages of an HSA?

Besides the tax benefits and helping you save for the future, an HSA also has these advantages:


You own and control the money in your HSA, and you decide how you want to spend it.


You can pay for things that your medical plan may not cover, like eyeglasses and orthodontic services, in addition to the usual medical expenses.


You can use your HSA debit card to pay for qualified medical expenses wherever you go.


If you move to another state or get health care coverage through an employer or another insurer, your HSA funds are still available for you to use.

Who can have an HSA?

You're eligible if you:

  • Have an HSA-compatible, high-deductible health plan
  • Can't be claimed as a dependent on someone else's tax return
  • Aren't covered by or already enrolled in another health care plan that isn't HSA-compatible
  • Aren't enrolled in Medicare