What Can You Pay For With Your HSA?
You can use your HSA to pay for or reimburse eligible medical expenses for yourself, your spouse, and your tax dependents.
What Is an Eligible Expense?
Generally, an eligible expense is anything prescribed by a doctor for a medical condition that returns you to a normal state of health (like doctor bills, prescriptions, eyeglasses, or fillings). Certain insurance premiums are also eligible, like qualified long-term care premiums and COBRA. And although you’re not eligible for an HSA if you’re enrolled in Medicare, you can use existing HSA funds to pay for parts of you or your spouse’s Medicare premiums.
See more examples of qualified medical expenses here. For a comprehensive list, see IRS Publication 502 and IRS Publication 969.
Using HSA Funds for Non-Eligible Expenses:
You can withdraw HSA funds for pay for non-eligible expenses at any time, for any reason. You’ll just need to include those withdrawals as taxable income in the year you made them, and they’ll be subject to ordinary income tax plus a 20% penalty.
However, once you’re 65, that 20% penalty disappears. After that, your HSA works like a 401(k) or IRA, but eligible medical expenses are tax-free.
HSA 101: Paying for Eligible Expenses
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hsa withdrawal tips & strategies
- You can pay for eligible medical expenses for your spouse and tax dependents even if they’re on different insurance, and even if they aren’t eligible to contribute to HSAs.
- You’re not required to reimburse yourself from your HSA in the same tax year as the expense. In fact, you can pay with personal funds and pay yourself back tax-free in the future (even years later). This is a great strategy if you’re investing your HSA funds. You’ll want to save your receipts to prove to the IRS that your expenses were qualified.
- Always show your insurance card when getting eligible medical service to ensure the expense counts toward your annual deductible. Then, wait to pay until you receive your Explanation of Benefits in the mail. That way, you’ll avoid paying more than you need to.
- For information regarding HSA withdrawals regarding domestic partnerships, divorce, etc., see IRS Publication 969.
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Frequently asked questions
You may withdraw funds online, via your debit card or by mail or fax.
- To withdraw funds online, log into your account and click “Withdrawal” on the top navigation (or click the “Withdraw Funds” icon). Enter the amount to withdraw and how you would like to receive the funds, then check “I agree to the terms and conditions” and click “Submit.”
- To withdraw funds via your debit card, simply visit any ATM. For your security, there’s a $500 daily limit on ATM withdrawals. Funds are deducted from your cash account. Please note that your debit card cannot access your investment account; however, you can move funds between your investment account and cash account online.
- To withdraw funds by mail or fax, download, complete and submit our Withdrawal Form. Please allow up to two weeks processing your request.