Which of the following is a common feature of a health savings account (HSA)?

A health savings account (HSA) is designed to provide individuals with a tax-advantaged way to save for medical expenses. A notable feature of HSAs is that funds can roll over from year to year. This means that any money not spent in a given year remains in the account and continues to grow tax-free, allowing for flexibility in managing health expenses over time.

The rollover feature is particularly beneficial as it encourages individuals to save and invest their money for future health care needs rather than feeling pressured to spend all the funds within a single year. This characteristic distinguishes HSAs from some other types of accounts where funds must be used within a specific timeframe, such as flexible spending accounts (FSAs).

Contributions to HSAs also provide tax benefits, including tax-deductible contributions, tax-free growth on investments, and tax-free withdrawals for qualified medical expenses, further highlighting the advantages of this type of account. These features collectively make HSAs a valuable financial tool in personal finance planning, especially for those with high-deductible health plans.