Health Savings Accounts are expendable accounts used to hold tax-deductible funds for an employee's current and future medical expenses. The primary criteria is that an employee must be enrolled in a high-deductible health insurance plan, which is defined as $1,000 for an individual or $2,000 for a family, although the deductible amount does not apply to most preventative care.

Since employees own their own HSA accounts, they are not subjected to the "use it or lose it" stipulation found in most insurance plans. They can use the funds at any time, but they cannot be reimbursed by their own health plan provider for the same procedure. Additionally, an employee cannot be covered by any other health insurance that is not high deductible, such as a spouse's plan. There are restrictions concerning yearly contribution rates ($2,650 for individuals and $5,250 for families), and employees eligible for Medicare benefits cannot contribute.

If a company offers HSAs to its employees, the company must make comparable contributions for all employees in the same coverage category. These contributions would not be included in employee wages and would be tax deductible. HSAs operate under the "safe harbor" amendment of the Employee Retirement Income Security Act.