What if I don’t have enough money in my HSA when I need to make a payment?
HSAs act just like a regular checking account in that you can only spend what has been deposited to date. Just like your personal checking account, checks can bounce and debit cards will reject if there isn’t enough money in your account. You should always watch your health savings account balance via on-line access and/or […]
Who determines if HSA distributions are used exclusively for qualified medical expenses?
The HSA owner is responsible for using the account within the rules. As you are purchasing medical goods and services, you should save your itemized receipts showing date of service, patient name, services rendered and how much insurance paid, if any. If you are ever personally audited, you will be asked to present receipts for […]
Does an HSA pay for the same things that regular insurance pays for?
HSA funds can pay for any “qualified medical expense”, even if the expense is not covered by your health plan. For example, most health insurance does not cover the cost of prescription eyeglasses, but you can use your HSA dollars to pay for those. If the money from the HSA is used for qualified medical […]
How do I know what is included as “qualified medical expenses”?
Unfortunately, we cannot provide a definitive list of “qualified medical expenses”. A partial list is provided in IRS Pub 502 (available at www.irs.gov). To be an expense for medical care, the expense has to be primarily for the prevention or alleviation of a physical or mental illness. The determination often hangs on the word “primarily.” […]
Who decides whether the money I’m spending from my HSA is for a “qualified medical expense?”
You are responsible for that decision, and therefore should familiarize yourself with what qualified medical expenses are (as partially defined in IRS Publication 502) and also keep your receipts in case you need to defend your expenditures or decisions during an audit.
What happens if I don’t use the money in the HSA for medical expenses?
If the money is used for purchases other than for qualified medical expenses, the expenditure will be taxed and, for individuals who are not disabled or over age 65, subject to an additional penalty.
Are dental and vision care qualified medical expenses under a Health Savings Account?
Generally, yes. However, cosmetic procedures, like cosmetic dentistry, would not be considered qualified medical expenses.
Can I use the money in my HSA to pay for medical care for a family member?
Yes, you may withdraw funds to pay for the qualified medical expenses of yourself, your spouse or a dependent. This is one of the great advantages of HSAs.
Can I use my HSA to pay for my child’s expenses?
Health care reform did not change the rules governing HSAs when it comes to paying for a child’s medical expenses. This means you can only use your HSA to pay for your child’s medical expenses if your child qualifies as your tax dependent (other than the income limitation).
How can my child qualify as my tax dependent?
There are two ways a child can be your tax dependent. The first way is if your child is considered a Qualifying Child and the second way is if your child is considered a Qualifying Relative. The following lists the requirements for each category. I. Qualifying Child a) The child lives with you for more […]