10 Myths About Health Savings Accounts

When you’re choosing a health plan for the year, one option may be a high-deductible plan that makes you eligible to contribute to a health savings account.

A mature couple using a laptop at breakfast.
(Image credit: Getty Images)

When you’re choosing a health plan for the year — whether you get coverage through your employer or on your own — one option may be a high-deductible plan that makes you eligible to contribute to a health savings account. Weigh this option carefully. There are a lot of misconceptions about how HSAs work. Health savings accounts offer a triple tax break — contributions aren’t taxed, the money grows tax-deferred, and it can be used tax-free for eligible medical expenses at any time.

Here, we take a look at several of the most common HSA myths — and the reality.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.

With contributions from