Individuals with high-deductible health insurance plans are eligible for health savings accounts (HSAs). A HSA is similar to a personal savings account except that the money must be used for medical expenses. HSA is done pre-tax. And as long as the funds are used for approved medical costs, there are no taxes when the money is withdrawn.

For people who are typically healthy, this can be a good choice. It provides an opportunity to accumulate tax-free dollars for use on future medical costs. The account is owned by you, not an insurance company. This means you control the money deposited and how it is spent.

A significant benefit is that the funds in a HSA roll over from year to year. Other medical savings accounts require that the money set aside be used in the same calendar year it is deposited. If it isn’t, the money reverts back to the insurance company.

Much like retirement plans, the IRS sets a limit on yearly contribution limits. In 2017, the maximum contribution for an individual is $3,400 and a family is $6,750. In 2018, that increases to $3,450 for an individual and $6,900 for a family. Individuals 55 or older are eligible for catch-up contributions of an additional $1,000 per year.

The drawback to health savings accounts is that they are only available with high deductible health insurance coverage. For people who need expensive health care, this might not be a good fit. Sickness and injury are unpredictable. If you haven’t had time to build up a reserve in the account, an unexpected hospital stay or trip to the emergency room means you’ll have to pay the expenses another way.

As a business owner, you’ll likely evaluate health insurance for yourself and potentially for employees. Work with a financial planner and/or business consultant to determine if a high-deductible medical plan paired with a HSA is the right fit for you or your business.