Health savings accounts are specialized savings accounts that allow people with specific health insurance plans to set aside money to pay for qualified medical expenses. These funds are deducted before taxes are withdrawn.
Health savings accounts are a popular option among American workers and also provide another option for Canadians who need to pay medical bills that provincial programs do not cover. 

How do HSAs work?
Health Savings Accounts (HSAs) enable people to put money aside for use throughout the year on allowable healthcare needs. Some HSAs are offered in addition to health insurance through company plans, or health insurance providers may market them separately to individuals. Some financial institutions also support their own HSA. 
People decide how much to contribute to an HSA account each year, although there may be government-mandated minimums. In the United States in 2017, the limit was $3,400 for an individual and $6,750 for a family, according to the financial resource NerdWallet.
Health Equity says that those who have an HSA account own the account, even if they change health plans, retire or change employers.

Who is eligible?
Unlike flexible spending accounts (FSAs), HSAs are restricted to people who participate in high-deductible health plans only, states Canada Insurance Plans. High-deductible plans often have lower monthly premiums, but come at the cost of these higher amounts that must be paid before insurance kicks in, states The U.S. Internal Revenue Service defines a high deductible health plan as any plan with a deductible of at least $1,300 for an individual or $2,600 for a family.
When HSAs are combined with high-deductible health plans, people may be able to lower their monthly health insurance premiums, all the while having a cache of savings to use toward eligible expenses. 

HSA benefits
HSAs can lower monthly health insurance premiums or offset some of the costs people pay for out-of-pocket health-related services, such as insurance copayments or services not covered by other insurance.
HSAs are used primarily for tax benefits. Contributions to HSAs are made pre-tax and are tax-deductible. Because a person is taxed after making an HSA contribution, individuals are taxed as if they make less money, thereby lowering their income tax.
Another possible benefit for some people is that HSAs can be invested in mutual funds, stocks and other investment tools to generate even more money. Health Savings Administrators, which helps clients invest their HSA funds, says some people find that investing in HSAs enable them to see greater savings that can be put toward retirement than in more traditional 401(k) or IRA contributions. 
High-deductible plans and HSAs are not for everyone, particularly people who require a lot of medical coverage throughout the year, necessitating high medical costs. People are urged to talk with a tax advisor to see if an HSA might be the right option for them.