The health savings account is a relatively new tax-savings vehicle, but it's one that makes a whole lot of sense. Learning to navigate this new option and understanding its benefits really can help people save a ton of money when unexpected medical expenses arrive.

Health savings account plans tend to come in two basic forms - employer sponsored and self-purchased. Since the rules for employer-sponsored plans might differ from business to business, we'll focus in on ones people who buy their own individual health insurance policies might benefit from.

In a nutshell, these savings plans allow people to save money on a tax-free basis for qualified medial expenses and future retirement medical expenses. To qualify, people must be on High Deductible Health Plans, which means they pay at least ,000 in deductible for self-only coverage. Most insurance companies will now let customers know when a plan they choose makes this option available to them.

The benefits of the health savings account are many. They include:

* Money in a health savings account is owned by the person who opens it. How to spend that money is entirely up to the person, but if it goes on non-qualified medical expenses, the tax benefit will be lost.

* The money "rolls over." Whereas some employer-sponsored and supported health savings account set ups don't allow for roll over from year to year, a self-opened account does. The money put into the account is income tax-free unless it is used for ineligible expenses.

* Helps people save up for expenses faster. Since income tax won't come into play with these accounts, the money saved can help add up to a better accumulation of cash if and when it's really needed.

* Easy to open. Most banks, credit unions, insurance companies with high deductible plans and so on will help people set up their own health savings account plans. The only requirement is the right kind of medical insurance policy. It should cost nothing to open one of these plans.

* Easy to use. Most HSAs come with a debit type card that can be used to pay for qualified medical expenses.

These plans are a little tricky to understand as far as all the minute details of what is an allowable expense and what isn't. The federal government offers highly detailed information on qualified expenses, but there are some generalizations that can be made. The types of things typically included in the qualified list are:

* Insurance premiums. This is allowed for the payment of COBRA insurance and for those who are unemployed.

* Co-payments. Some times co-payment amounts can be charged to the health savings account.

* Prescription medications. These are generally considered eligible expenses as are over-the-counter medications and medical supplies.

* Dental and vision care. In most cases, expenses associated with non-cosmetic dental and vision care are considered fair game.

A health savings account can be a great way to bank up money to pay for medical expenses without having to feel the bite of income tax. As long as the money used in these accounts is spent on qualified medical expenses, the savings extends after use, as well.