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Health savings accounts
Health savings accounts were established as part of the Medicare Prescription Drug, Improvement and Modernization Act, which was signed into law by President George W. Bush on Dec. 8, 2003. They were developed to replace the Medical Savings Account system, so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses. Generally, an adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may establish an HSA.
Health savings account funds are owned by the individual and can be carried over from year to year, unlike other flexible health spending plans.
QuickSource documents
QS90719—Laws for small businesses—health care and taxes
Common forms
IRS Form 8889: Health savings accounts
Publication 969: Health savings accounts and other tax-favored health plans