What defines a health savings account (HSA)?

A health savings account (HSA) is specifically designed to help individuals save money for qualified medical expenses. It offers tax advantages, meaning contributions to the HSA are pretax, which can lower taxable income, and withdrawals for eligible healthcare costs are tax-free. This makes HSAs a useful tool in managing healthcare costs, particularly for those with high-deductible health plans. They can be used to pay for medical expenses such as doctor visits, prescription medications, and other health-related costs, which aligns with the purpose and benefits of an HSA.

The other options do not describe the specific characteristics and purposes of an HSA. An investment account for retirement purposes does not focus on healthcare expenses, a savings account for purchasing a home is aimed at home-related savings rather than health, and a checking account for daily expenses serves a different function that does not involve the tax advantages or medical expense focus of an HSA.