What is typically the funding source for a Health Savings Account (HSA)?

A Health Savings Account (HSA) is designed to help individuals save for qualified medical expenses with tax advantages. The funding for an HSA can come from multiple sources, primarily allowing contributions from both employees and employers. This flexibility is a significant benefit of HSAs, as it enables individuals to maximize their savings for healthcare costs.

Employees can make pre-tax contributions to their HSAs through payroll deductions, which lowers their taxable income. Additionally, some employers might choose to contribute to their employees’ HSAs, either as a part of the employee benefits package or as matching contributions to encourage participation. This collaborative funding structure helps individuals build a robust savings balance for healthcare expenses, aligning with the purpose of HSAs to alleviate the financial burden of medical costs.

Government funding is not a source for HSAs, and while employee-only or employer-only contributions might occur, the correct answer encompasses the broader range of possibilities that includes both parties contributing to the account. This feature distinguishes HSAs from other savings or medical reimbursement accounts, making them a versatile savings tool.