Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Health savings accounts or

HSAs offer a way to save for medical costs. People can use these tax advantage accounts today or wait

for retirement. Morningstar has evaluated and ranked HSA providers on how well they help people

meet their goals. I'll talk with one of the researchers about this year's best of rankings.

But first, Morningstar Inc. editor, Margaret Giles explains how to work HSAs to your

advantage. Thanks for joining me, Margaret. Yeah, thanks for having me. So let's start with an

explainer. What's an HSA? Sure. So there's basically two pieces to an HSA. You can either

use it as a spending account or an investing account. And you use it for medical expenses.

So on the spending side, you contribute money to this account.

You can then pull it out to pay for qualified medical expenses.

On the other side, on the investing side, you can contribute to this account

and then invest in mutual funds

or whatever they have available to you. And then that money can grow and you can ultimately

pay for costs down the road. So what makes an HSA different from an FSA or a flexible spending

an account? Absolutely. So you can kind of think of an HSA spending account really similarly to a flexible spending

account.

In both cases, you're contributing money and you can take out that money and use it on qualified

expenses.

There's basically more kind of restrictions on an HSA up front where you can only really

contribute to one if you have a high deductible health care plan. Otherwise, you're not

eligible to contribute. A flexible spending count, on the other hand, you can contribute no

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