health savings accounts health savings accounts

Money deposited in a health savings account is tax-deductible, grows tax-free and can be used to pay for medical expenses. The annual maximum allowable contribution to an HSA is slightly lower for some people this year. Fanatic Studio/Collection Mix: Subjects RF/Getty Images hide caption

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Fanatic Studio/Collection Mix: Subjects RF/Getty Images

A health savings account works much like a personal savings account — with a difference. Any money in it that we use to pay for certain medical expenses isn't taxed. Oivind Hovland/Ikon Images/Getty Images hide caption

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Oivind Hovland/Ikon Images/Getty Images

Under Internal Revenue Service rules, high-deductible insurance plans that can link to health savings accounts can only cover preventive services, such as vaccinations and mammograms, until patients pay down their deductible. Andrew Caballero-Reynolds/AFP/Getty Images hide caption

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Andrew Caballero-Reynolds/AFP/Getty Images

In order to get the tax advantages of a health savings account, the health plan it's linked to has to meet certain criteria. iStockphoto.com hide caption

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iStockphoto.com