An HSA is a medical account where investments can grow tax-free. Neither contributions nor withdrawals are taxed.

• pros
  • contributions deducted from income
  • capital gains do not incur tax
  • employer may match contributions
  • funds roll over year-to-year, unlike FSA
  • account funds can be used to reimburse medical expenses with no deadline
    • Copayments
    • Costs towards deductible
    • Costs partially covered (coinsurance)
    • Dental
    • Vision
    • Chiropractic
    • Relevant transportation
    • "Durable medical equipment"
      • Nebulizer
      • CPAP
      • Wheelchair
      • Glasses
      • Hearing aids
  • Over 65, funds can be withdrawn for any purpose and is taxed as income
  • you can designate charities as beneficiaries and the amount designated does not incur tax and is subtracted from your estate
• cons
  • requires a HDHP
  • 10% penalty when withdrawing before 59.5 years old