• Save money using your HSA.spending money image by Richard J Thompson from Fotolia.com
  
  The Health Savings Account, or HSA, is an approach to health care savings signed into law in December of 2003. This individual, tax-exempt trust is unlike a flexible spending account in that you do not have to use your HSA funds every year to avoid losing them. HSA balances roll over from year to year, and your funds will continue to grow tax deferred. The HSA account can be used to save a great deal of money when used in the right way.
  
  

Open Your Account Right Away

• Open your HSA right away so funds are available when you need them.piggy bank image by Vladislav Gajic from Fotolia.com
  
  Don't wait until you have a medical expense to begin using your HSA. The best time to start saving is now. You can only use your HSA to pay for medical expenses incurred after you open your account. If you are unable to contribute the full amount, you should at least contribute a minimal amount in order to open your account. If you later incur greater expenses, you may always opt to up your contribution.
  
  

Take the Full Deduction

• Take the full deduction to obtain the greatest tax benefit.tax forms image by Stephen VanHorn from Fotolia.com
  
  To obtain the full tax benefit of an HSA, you must take the full deduction allowed by law. Of course, you should never deduct more from your paycheck than you can afford, but whenever possible, use your HSA account to its fullest advantage. Even if you never end up needing the funds for medical expenses, you can use this account to save money for retirement. However, please note, it is always best to compare all of your available options before choosing where to save your money. While HSA savings may be the best option for some, others may have access to retirement accounts that pay out at a higher percentage, even after taking the HSA tax deduction into consideration.
  
  

Use Non-HSA Funds For Medical Expenses

• Non-medical withdrawls will be subject to a 20 percent penalty starting in 2011.20% violet image by Kho from Fotolia.com
  
  Since HSA funds grow tax-deferred, it often makes sense to use non-HSA funds for medical expenses while using your HSA funds for savings. The greatest tax benefit of using an HSA account occurs upon deduction. So, you can use this account to save money without paying taxes on interest until the time comes to withdraw. Just remember, HSA funds withdrawn for non-medical expenses before you reach the age of 65 are subject to a 10 percent penalty. And this penalty is scheduled to increase to 20 percent after 2010.
  
  

Use Your HSA to Save Up For Insurance Premiums

• Use your HSA to save up for insurance in retirement.ready for retirement image by Pix by Marti from Fotolia.com
  
  While you may not use your HSA funds to pay for traditional insurance premiums, there are a few exceptions. For example, you may use these funds to pay for insurance premiums if you are over the age of 65. HSA savings may also be used to pay for COBRA benefits if you lose your job. So, one way to make use of your HSA account is to simply build a reserve to ensure you can stay insured during retirement or in between jobs.