Reprinted with permission from The Health Lawyer, February 2019 (31:3), at 14-15. ©2019 by the American Bar Association. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Health Savings Accounts (“HSAs”) established in connection with employment-based group health plans are typically structured to avoid the reach of The Employee Retirement Income Security Act of 1974 (“ERISA”), unlike the health plans they accompany. An HSA is a tax-exempt trust or custodial account that eligible individuals covered under a high deductible health plan (“HDHP”) can set up with a qualified HSA trustee to use pre-tax contributions to pay or reimburse certain medical expenses incurred. Due to the HSA’s favorable tax status, HSA holders are eligible to claim tax deductions for contributions made and earn tax-free interest on HSA assets, among other benefits.