What it means
To put money into an HSA, you generally must be enrolled in an HSA-eligible high-deductible health plan. Contributions can be made with pre-tax pay or deducted on your tax return, interest and investment growth are not taxed, and withdrawals for qualified medical expenses are tax-free.
Unlike an FSA, the money rolls over every year and belongs to you, even if you change jobs or plans. The IRS sets contribution limits each year.
Prescription drugs, including GLP-1 medicines, are generally qualified expenses. HSAs can also pay deductibles, copays and coinsurance. They generally cannot pay insurance premiums.
Because high-deductible plans make you pay more before coverage starts, an HSA works best when you can fund it ahead of large costs. Keep receipts, since you may need to show that a withdrawal was for a qualified expense.
Why it matters
An HSA can turn a GLP-1's out-of-pocket cost into pre-tax spending, which lowers the real price.