How does a HSA work?

How Does a Health Savings Account Work? 

Contributions to the HSA are tax-deductible or, if made as payroll deductions, on a pre-tax basis. Withdrawals are tax-free provided they're used to pay for qualified medical expenses, which include those for dental and vision care—expenditures that many traditional health insurance plans may not cover.

Most HSAs issue a debit card, so you can pay for prescription medications and other eligible expenses right away. If you wait for a bill to come in the mail, you can call the billing center and make a payment over the phone using your debit card.

Any money that is in your account at the end of the year remains in your account to pay for future qualified medical expenses. And it does so indefinitely. The account and its funds belong to you, and you retain ownership even if you change health insurance plans, change jobs, or retire. While it's in the account, the money grows tax-free.