How does banking and the HSA work?
HSA accounts operate much like Individual Retirement Accounts (IRAs). The employee owns the account and controls the timing of withdrawals and if those withdrawals are tax-free or taxable. HSA trustees are usually banks. Funds in the account are available through debit cards or checks. Deposits can be made by a payroll deduction through the employer, electronic transfer from another bank account or by submitting a check and deposit slip. Account balances earn interest. HSA trustees usually offer investment options for health savings accounts. Funds may be invested in stocks, bonds or mutual funds. Your employees can use the money in their accounts to pay for current health expenses or keep the money in the account as an investment.
