Health Savings Account (HSA)

Health Savings Accounts are an employer and employee tool and operate according to IRS Section 223 regulations. They are individually-owned bank accounts used for the tax-preferred reimbursement of qualified medical expenses for employees, as defined by Section 213d of the IRS code.

Employer and employees can contribute to the HSA. During the plan year, employees access these tax-preferred funds with a debit card or check. Should an employee have a positive balance in his or her HSA at the end of the plan year, that amount is rolled over in full and can be used for future healthcare expenses.

The employee should also retain proof of purchase to verify the funds were spent on eligible medical expenses. Unlike the FSA and HRA, receipt verification is not mandatory, but receipts should be retained for audit purposes.

The employee deposits money (contributed by their employer and themselves) into a savings account, manages this money, invests it, and collects tax-free interest. This type of account puts employees in charge of making financial decisions.

There is a direct correlation between making responsible decisions and saving money, so members should use the education they received to make informed healthcare choices.

If an employee terminates employment during the plan year, they take their HSA with them to spend as they see fit. The HSA is not a COBRA-eligible benefit.

Coaches' Takeaway

The employer chooses an HSA custodian, determines the funding amount for employees by eligibility tier (individual, family, etc.), and also determines the frequency of employer contribution.

Tools & Resources

CDHPCoach’s Storage Facility, where the Coach has organized and compiled a vast amount of tools and resources for you to access.


Housed here are key components and information within the book, Bend the Healthcare Trend which was the impetus behind the CDHPCoach.