How to Use an HSA Account

Starting a health saving account (HSA) gives you several tax advantages. The money you put into the account does not get taxed, and you don’t pay taxes when you use the money for qualifying medical expenses. It’s as close as you can get to tax-free money.

Before you open an HSA account, though, you should learn how to get the most from it. Otherwise, you could miss opportunities to save money on your healthcare expenses.

How HSAs Work With Your Health Insurance

If you have a high deductible health plan (HDHP), then you probably qualify for an HSA. HDHPs usually have deductibles of at least $1,350 for an individual or $2,7000 for a family. If your insurance plan’s deductible is over those amounts, you probably qualify to open an HSA

HSAs are intended to offset the sudden cost of medical treatments. When you have a high deductible, you have to spend thousands of dollars before your insurance company starts covering your entire medical bill.

Items and Services You Can Buy With an HSA Account

You can only use your HSA to pay for qualifying medical expenses. You can pay for qualifying expenses with a debit card that keeps track of the money in your HSA. Unfortunately, many people find it difficult to determine what expenses qualify.

Some costs that automatically qualify for HSA payments include general medical procedures and products, including:

  • Dentistry services.
  • Home care.
  • Imaging services.
  • Prescription drugs.
  • Medical equipment.
  • Smoking cessation products and programs.

In most cases, you can also use your account to pay for:

  • Eyeglass lenses.
  • Physical therapy.
  • Hearing aids.
  • Breast pumps.

You can even use your HSA to pay for out-of-pocket travel expenses to treatment centers, such as when you need to fly to another city for a specialized treatment.

Items Not Covered by HSA

Learning how to use an HSA also means that you need to know which items are not covered by the account. For instance, you cannot use your HSA to pay for over-the-counter drugs like ibuprofen and decongestants.

Other items that do not qualify include:

  • Nutritional supplements.
  • Weight-loss supplements.
  • Cosmetic procedures.

Keep in mind, however, that your HSA may pay for these and other items when you need them for a specific health condition or your doctor prescribes them. For instance, you can use your HSA to pay for vitamins if you have a specific deficiency that requires the supplement. You can also use your HSA for massages when you need the massage to treat a muscle injury.

If you qualify for an HSA, take advantage of the tax incentives to make your medical expenses more affordable. The program exists to encourage healthy lifestyle decisions and help you do more with your money.