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Health Savings Account (HSA)

An account into which employees can choose to put pretax money from their paychecks to cover high health insurance deductibles and other noncovered medical expenses, like copays and contacts. Unlike an FSA (flexible spending account), any unused money in the account rolls over to the next year and earns interest that is also tax- free. If you’ve got money left in your HSA when you turn sixty- five, you get to spend it on anything you want. (See also: flexible spending account)

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