Aging isn’t always easy, especially when it comes to medical expenses. Even the most athletic or health-conscious people can’t avoid a regular doctor’s bill or prescription costs. Unfortunately, it’s simply a fact of life—and it’s not getting any cheaper any time soon.

Health care insurance provides financial support, but there are often gaps in coverage. That’s where an HSA, or Health Savings Account, can help. Here is a rundown on how it works.
  

  
WHAT IS AN HSA?
An HSA may be new to you, but you’re probably more familiar with it than you think. After all, most Americans have a savings account—around 70%, according TIME partner, NextAdvisor.

So, like a savings account, an HSA lets you store money in a secure place. However, an HSA is unique because it holds funds specifically for future medical expenses. You make these contributions to the account with pre-tax dollars, and they roll over from year to year. Most health insurance companies offer these accounts, but you can open one with certain financial institutions if yours doesn’t.
  

  
WHO CAN HAVE AN HSA?
The IRS determines who is eligible for an HSA based on a list of requirements. Namely, you have to be covered under a high-deductible health plan (HDHP). An HDHP is essentially a normal health insurance plan, but it has a deductible of at least $1,400 for individuals or $2,800 for a family (according to the IRS).

To stay eligible, you cannot purchase coverage outside your HDHP. However, certain types of plans for diseases and illnesses, such as cancer insurance, that pay a set dollar amount, are acceptable.

Additionally, you also lose eligibility if someone claims you as their dependent on their tax return.
  

  
WHAT CAN I SPEND AN HSA ON?
The money you pour into an HSA is reserved for certain dental, health care, and vision costs. And you’re not the only one the account covers. You can also use the funds for your spouse or an eligible dependent.

But to get more specific, an HSA helps pay for expenses such as payments to your doctor, medical equipment or supplies, medical services like at-home care, MRIs or other imaging, and prescriptions. On top of that, you can use your HSA to reimburse yourself. If you have to pay out of pocket for an HSA-qualified medical expense, you can take money out of the account to pay yourself back.

Keep in mind: while an HSA helps in many situations, it won’t cover everything. For example, you can’t use it to pay for cosmetic surgeries or over-the-counter items.
  

 
CAN I INVEST AN HSA?
HSAs start out as cash accounts. They earn interest gradually at the pace of a savings account. Once you hit a certain balance, though, you can make your HSA into an investment account.The great thing about using an HSA for investing is the tax benefits. From the start, your contributions to the account are income tax free, which reduces your overall income tax. Once the money is there, it grows tax-free. Withdrawals also go without taxation as long as they’re for an eligible medical expense. Even at that, once you hit 65, you can use the funds without penalty (although you will pay income tax on that).

HOW CAN I SPEND MY HSA WISELY?
There are a few ways to use your HSA responsibly. Of course, the tried and true method is to use it for medical costs like most HSA account holders who spend around 96% of their yearly contributions this way, according to the Lively Blog. Your insurance plan won’t cover everything all the time. An HSA can minimize the bite into your finances.

You can also maximize the value of your HSA. Cap out on your contributions and save the money for a future date. This can make it a valuable retirement planning tool.