HSA (Health Savings Account)

A tax-advantaged account for medical expenses, available only to individuals covered by a High-Deductible Health Plan (HDHP). Contributions are deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Employer contributions are generally excluded from employee income for regular employees, but for S corporation 2% shareholders, employer HSA contributions must be included in W-2 wages.