Hi, you may be wondering, what are HSA funds? Health Savings Accounts (HSAs) are tax-advantaged medical savings accounts that people can use to pay for out-of-pocket medical expenses. HSAs have a triple tax benefit, which is contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. Money in an HSA is owned by the person who opens it and can pay for a wide range of qualifying medical expenses.

HSA funds require people to enroll in a high-deductible health plan (HDHP) before they can be used. Then, employees can contribute to the HSA via payroll deductions or personal contributions. In 2023, the max contribution for people with self coverage is $3,850 and the max contribution for people with family coverage is $7,750. For people 55 years or older, you are able to contribute an additional $1,000 per year to your HSA.

You can use HSA funds to pay for qualifying medical expenses like deductibles, copayments, prescriptions, and vision and dental care. Also, HSAs can pay for qualified medical expenses that are not covered by insurance like acupuncture and chiropractic care. HSA funds can be paid through debit cards, checks, or online bill pay. Importantly, people must keep receipts for their HSA expenses, proving the funds were used for qualifying medical expenses. Also, HSA funds can be invested and grow tax-free. An HSA is similar to a traditional individual retirement account (IRA). So, HSAs can be a useful retirement savings vehicle and a tool for paying for current medical expenses.

So, Health Savings Account (HSA) funds can be used to pay qualifying medical expenses like deductibles, copayments, prescriptions, and vision and dental care. HSA funds can be paid through debit cards, checks, or online bill pay. Importantly, people must keep receipts, proving that funds were used for qualifying medical expenses. Also, HSA funds can be invested and grow tax-free, which makes HSAs a useful retirement savings vehicle and a tool for paying for current medical expenses.