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Contributions are deductible, growth is untaxed, and withdrawals for qualified medical expenses are untaxed. No other US account does all three. Payroll contributions add a fourth break by escaping the 7.65% FICA tax, which a 401(k) never does.

You must be covered by a qualifying high-deductible health plan, with no other disqualifying coverage, and not enrolled in Medicare or claimed as a dependent. Eligibility is checked monthly, so mid-year changes prorate the limit.

That depends on whether you can pay medical bills from other money. If you can, invest the balance and let decades of compounding run. If a $3,000 bill would go on a credit card instead, keep at least the deductible in cash — the tax break is not worth 20% interest.

The 20% penalty for non-medical withdrawals disappears. You can spend it on anything, paying ordinary income tax like a traditional IRA, or keep using it tax-free for medical costs — including Medicare premiums, which qualify. That makes it strictly better than a 401(k) at that point.

Yes, and there is no deadline. An expense incurred after the HSA was opened can be reimbursed decades later, provided you kept the receipt. Some people pay out of pocket for years, let the account compound, then withdraw tax-free against a folder of old receipts.