What is a primary function of a Health Savings Account (HSA)?

• A. Replaces the plan
• B. Pays all medical costs regardless
• C. Pays for qualified health services the plan doesn't cover.
• D. Funds general expenses

Answer: (C)

HSAs provide tax-advantaged funds to pay for qualified medical expenses, and they work best with a high-deductible health plan. Their main function is to cover out-of-pocket costs that the insurance doesn’t pay for, using money that can be contributed pre-tax and withdrawn tax-free for qualified medical expenses. Because of that, paying for qualified health services the plan doesn’t cover accurately reflects the role of an HSA in filling gaps in coverage and providing a tax-efficient way to handle deductibles, copays, and similar costs. It’s not a replacement for the health plan, it doesn’t automatically pay all medical costs, and it isn’t used for general expenses.