A Health Savings Account is a tax-exempt account established for the purpose of paying qualified medical expenses for individuals covered under high deductible health plans ("HDHPs"). Funds from HSA accounts may be used to cover qualified medical expenses tax-free until the annual deductible of the HDHP is met. Any unused funds in the account remain the property of the individual and may continue to earn interest until they are disbursed.

This is an excellent option for those with an HDHP, which is required to open an HSA. Your contributions are tax-exempt and withdrawals to cover eligible medical expenses are tax free. Both you and your employer can contribute but the funds are yours and you will not lose the funds each year if you do not access the account.

An HSA gives you the ability to better afford a high deductible health plan and the opportunity to accumulate tax-deferred income.

A First Niagara HSA also offers these important employer advantages:

• HSA works hand-in-hand with lower-cost HDHP to help contain the cost of health care. If you're not currently offering an HDHP option, First Niagara Benefits Consulting can help design a plan to meet your business needs.
• Pre-tax contributions reduce FICA liability.
• Contribute to your employee's health and welfare by funding all or part of employee HSAs, with or without employee matching contributions.
• Healthier, more productive employees - Those enrolled in HDHPs and HSAs are more engaged in their health and the cost of the health care services they utilize.

For more information visit the IRS website.