Which statement regarding health savings accounts (HSAs) is correct?

Health Savings Accounts (HSAs) are specifically designed to allow individuals to save money tax-free for qualified medical expenses. The correct statement highlights that HSAs provide an alternative to higher premiums associated with traditional health insurance plans. Instead of paying elevated premiums, individuals can opt for a high-deductible health plan (HDHP) and use their HSA funds to cover out-of-pocket expenses. This approach can make healthcare expenses more manageable and allows for flexibility in how individuals allocate their healthcare dollars.

The other statements do not accurately portray the nature of HSAs. HSAs are not required to come with high premiums; in fact, they usually accompany high-deductible plans, which feature lower monthly costs. They are not limited to catastrophic expenses alone, as individuals can use HSA funds for a broad range of medical services, including preventive care and routine medical expenses. Lastly, HSAs are not automatically offered to all policyholders; individuals must typically establish their HSA and meet specific requirements to qualify, often tied to their choice of health insurance plan.