HSA stands for "health savings account."  With a health savings account, an individual can deposit money, tax-deferred, that can be used for medical expenses.  When used for medical expenses the money then can be withdrawn tax-free. 

With an HSA, most of your medical expenses can be paid with tax-free dollars.  It allows you to pay for your first dollar medical costs (i.e., doctor visits, routine check ups, prescriptions, deductable and coinsurance costs) instead of prepaying the insurance company for possible medical expenses.  This allows you to save money on your health insurance premium and keep more money in your pocket. 

First an individual has to purchase an HSA qualified health insurance plan.  This is considered an HDHP (High Deductable Health Plan).  Once that is done, the individual goes to most any bank or credit union and opens a Health Savings Account (HSA).  The money in this account will be free of tax and in most cases, depending on the amount invested, it builds interest.