It's like an ordinary bank account, stock brokerage account, or mutual fund account but with special rules as to how you can use it.
You can get a tax deduction for what you deposit into the account.
The tax deduction is the only reason to have the account. There is no other reason.
What can you do with it?
You can pay for health related expenses from the account just like you could with any checking account. This page has more explanation and links to further information.
The health insurance policy does not have to cover all of the allowable items that you can pay for from the account. You can pay for dental or chiropractic or vision expenses out of the account, even if you have no dental or vision plan and have no coverage for chiropractic visits. You can't pay your health insurance premium out of the account, but you can pay for long term care insurance premiums from the account.
You can also pay for qualified expenses for other immediate family members even if they are not covered by the health plan.
If you want to, you can put in the maximum every year to get the maximum income tax deduction whether or not you spend any of it. There is no upper limit on the accumulated balance.
If you prefer, deposit nothing until you have an allowable expense. Deposit only the amount of the expense. Use the account to turn expenses into tax deductions in effect. You do not have to save and keep a balance in the account if you do not want to.
If you prefer, save towards your chosen deductible+coinsurance every month until you have saved up the out-of-pocket amount in your health plan. Each deposit is tax-deductible and you will have the money if you ever need to pay your deductible+coinsurance etc.
Since your plan costs less per month than a plan with copays and a low out-of-pocket, that would make it easier to save.
That was the original idea for the introduction of the HSA. Pay less for insurance and save (not spend) the difference. The tax deduction was introduced to encourage you to do that.
So what should you do?
Bear in mind that if in the future you were to need chronic, ongoing expensive treatment, then each year you would have to pay the out-of-pocket amount in the plan that you choose.
However, if you think that the odds are against it, and if you pay less for insurance per month, you have some extra money to save against that possible eventuality.
Do you really need insurance for doctor visits and generic prescriptions? People at the poverty level who are eligible for Medicaid might need that, but do you? If not, pay for the small stuff out of pocket and insure, and save, for the possible big expense.
If you do not use your health insurance, you do not get a refund. So why not pick a higher deductible, pay less per month, deposit the savings, get a tax deduction for your deposits, and be money ahead each year?
... but first, you have to have qualifying health insurance that entitles you to open an Health Savings Account. 'HSA' is uaually in the name of the qualifying plans in the quote results. You can also select "HSA" in the "Plan Type" selection box in the quote results page so only HSA-qualified plans are listed.