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As COVID-19 sweeps across the globe, “we know now more than ever our health is at risk and that we may experience unexpected medical expenses,” says Juan Carlos Cruz, founder of Britewater Financial Group in Brooklyn, N.Y. What you may not know is that a health savings account (HSA) could help and that The CARES Act, recently passed by Congress, offers extra assistance for people using one.

An HSA is a triple tax-sheltered account to pay for certain medical expenses if you have a high deductible health plan (a minimum annual deductible of $1,400 for an individual, $2,800 for a family). You can contribute up to $3,550 as an individual or up to $7,100 for a family in 2020, with an extra $1,000 if you’re 55 or older. HSA contributions are tax-deductible; earnings on the accounts grow tax-free, similar to 401(k)s, and you can make tax-free withdrawals for health costs.

If your employer doesn’t offer an HSA you can still open one — if you have a high deductible health plan — at a bank, broker or credit union. Some financial institutions don’t charge to open the account; others levy a small opening fee or account maintenance fee. The maintenance fee is often waived, however, if you keep a minimum balance in the account.

The ABCs of HSAs

But many people are confused about HSAs and loads of workers offered them don’t sign up.

Many employees who have HSAs don’t understand how they work or how contributions can grow.