If you’ve been in the insurance industry for the last several years, you’ve likely heard plenty about HSAs. In fact, chances are your clients are asking for them. Maybe you’re selling them already (and if you are, please participate in our forums and tell us about your experiences). Maybe you’re looking for help in making them easier to explain or implement (check out our Resources section!). Or maybe you’re still looking for the right reason to sell them.

Here’s a reason: There are already over 10 million folks qualified for an HSA and that number is growing by 30%-40% per year. 

To put it short, HSAs are good for employers and good for consumers. And as adoption continues to rise, they’re going to make up more and more of your business.

An HSA Is:

So, maybe you’ve been looking for the right explanation of an HSA. We’ll take a crack at it. An HSA is a tax-advantaged healthcare savings account that belongs entirely to the consumer. The concept of an HSA is very similar to that of a 401(k) program—consumers (and their employer, or anyone else) make tax-free contributions to the account, and money in the account can be invested for tax-free earnings.

The HSA is designed to be used at any time for eligible medical expenses. All HSA funds spent on eligible medical expenses are also tax-free. And since the HSA is individually owned by the consumer, whatever money goes unspent stays in the HSA where it can grow tax-free over the course of a lifetime.

An HSA must be combined with a qualified high-deductible health plan (HDHP), which provides consumers with safety-net coverage against serious illness or injury, as well as significantly reduced premiums—the savings of which can be used to fund the HSA and save for future medical expenses.