Contributing to a health saving account (HSA) is a great way to prepare for unexpected medical expenses. They're tax-advantaged accounts that can make healthcare costs more manageable in the long run. Find the best software for HSA in Canada by visiting this website.

There's plenty of confusion surrounding HSA Canada providers and what they can do. This blog will clear things up and answer the most common questions about contributing to an HSA.

What Exactly is an HSA?

An HSA is a tax-advantaged account. Both individuals and employers can contribute money to this account every year. However, employer contributions are optional.

One of the biggest perks of having an HSA is the ability to stash away pre-tax income. Think of it as a retirement plan. However, you're free to use the funds for qualified medical expenses. That includes doctor's visits, surgical procedures, prescription drugs, and more.

Any withdrawal you make to pay for medical expenses is untaxed. Once you reach the age of 65, you can make tax-free withdrawals for any reason.

How Much Can I Contribute Each Year?

The amount can change every year. For 2022, the most an individual can contribute is $3,650. Those with family plans can contribute up to $7,300. If you're over the age of 55, you can contribute an additional $1,000 to "catch up."

Do HSA Benefits Roll Over?

If you're worried about losing your benefits at the end of the year, you're in luck. HSA contributions automatically roll over into the following year. Not only that, but they can generate interest!

As a result, an HSA can grow substantially over several years. There are some strict requirements to contribute to HSA Canada providers. But even if you lose HSA-eligibility, that money is there to use whenever you need it.

It's much different from a flexible spending account (FSA). With an FSA, the benefit doesn't roll into the next year. Think of it as a "use it or lose it" benefit.

Fortunately, that's not the case with an HSA. It's there to grow with you, providing peace of mind and financial security well into the future.

Read a similar article about Canadian human resource software here at this page.