Question

Which is a tax-deferred account used for qualified health care expenses in which unused funds roll over from year to year?

a. HSA
b. CSCP
c. HCRA
d. FSA

Answer 1

A Health Savings Account (HSA) is used for saving for qualified health care expenses tax-free, with unused funds rolling over year to year.

Step-by-step explanation:

The tax-deferred account used for qualified health care expenses where unused funds roll over from year to year is a Health Savings Account (HSA). An HSA allows individuals with high-deductible health plans to save money for medical expenses tax-free. Funds contributed to an HSA are not subject to federal income tax at the time of deposit. Unlike other healthcare-related savings accounts, the funds in an HSA roll over and accumulate each year if not spent. This makes HSAs an excellent tool for both healthcare expense management and long-term financial planning.