Your HSA funds can be used tax free to pay for out-of-pocket qualified medical expenses, even if the expenses are not covered by your HDHP. This includes expenses incurred by your spouse or dependents.

There are hundreds of qualified medical expenses, including:

• Over-the-counter medications for which you have a prescription from your doctor;
• Dental visits;
• Orthodontics;
• Glasses

All of these expenses may be paid for with distributions from your HSA, free from federal income tax or state income tax (for most states).

Refer to IRS Publication 502 for a more complete list of qualified medical expenses.

Yes, you may use funds from your HSA to pay qualified medical expenses for you, your spouse or a tax dependent free from federal income tax and state income tax (for most states). This is one of the great advantages of HSAs.

If you take a non-qualified distribution, you are subject to ordinary income tax and a 20% penalty tax. If you are age 65 or older, disabled or your estate pays medical expenses after your death, the 20% penalty may not apply.

You are required to confirm that your distributions are for qualified medical expenses. It is your responsibility to keep all documents (such as receipts) that show how you used your HSA, including any distributions used for non-qualified transactions and self-report distributions on your annual tax return.

Distributions from your HSA that are used exclusively to pay for qualified medical expenses for you, your spouse or tax dependents are excludable from your gross income. Your HSA funds can be used for qualified medical expenses and will remain free from federal income tax and state income tax (for most states) even if you are not currently eligible to contribute to your HSA.

If you take a non-qualified distribution, you are subject to ordinary income tax and a 20% penalty tax. If you are age 65 or older, disabled or for the year in which you die, the 20% penalty may not apply.

Yes. Most dental and vision care expenses are qualified expenses. For example, glasses, contacts and braces are qualified expenses; cosmetic procedures, (e.g., cosmetic dentistry), are generally not considered qualified medical expenses

Yes. Distributions used exclusively to pay for qualified medical expenses, even those incurred under a non-HDHP, continue to be free of federal income tax and state income tax (for most states). You may not, however, contribute to your HSA because you are not covered by a qualified HDHP at this time.

No. Medical expenses incurred before you establish your HSA are not eligible for tax-free reimbursement from your HSA. You can receive tax-free distributions from your HSA for qualified medical expenses you incur after you establish your HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% penalty tax.

Your HSA must be established before qualified medical expenses are incurred to receive distributions free from federal income tax and state income tax (for most states).

Just like a checking account, you can only access funds that are available in your account. However, as additional funds are deposited to your account, you can reimburse yourself for qualified medical expenses paid out of pocket, so long as those expenses occur after the date of the establishment of your HSA.

Yes, provided the services are qualified medical expenses, the distribution would be free from federal income tax and state income tax (for most states).

Unless the treatment is for preventive care, which may be covered by the HDHP before the deductible is met, you are responsible for the full charge until you have met your deductible; then co-payments and co-insurance apply. However, you may use your HSA funds for these qualified medical expenses without paying federal income tax or state tax (for most states).

No, you are never required to withdraw funds from your HSA. If you never use your funds, your spouse may inherit your account and continue its tax-free status, or your beneficiaries will receive the funds subject to estate taxes

No, a single expense can only be reimbursed by a single account. However, you may use both accounts to reimburse yourselves for different expenses. For example, you may use your spouse's HSA to reimburse the entire family's dental expenses; yourself included, and use your HSA to cover expenses incurred prior to reaching the deductible.

If there is clear and convincing evidence that this was a mistake, you may repay the mistaken distribution no later than April 15 following the first year that you become aware of the mistake. Under these circumstances, the distribution is not included in gross income and the 20% penalty does not apply. You will need to keep records that document the actions you took.

You may access your funds through:

• Your Debit Card
• Your HSA Checkbook
• Online Bill Pay

You can also pay for eligible expenses with any other form of payment and request reimbursement from your account.

Be sure to retain all receipts and other documentation related to your distributions in the event you are later asked to substantiate an expense for tax purposes.

No. You cannot borrow against or pledge funds in your HSA.

Yes, as long as the eligible expense was incurred after the establishment date of your HSA, you can reimburse yourself with HSA funds in one of the following ways:

• Writing yourself a check from your account (if you have an HSA checkbook)
• Initiating a check reimbursement or transfer online
• Withdrawing cash from the ATM (if you have ATM access)

Be sure to retain all receipts and other documentation related to your distributions in the event you are later asked to substantiate an expense for tax purposes.

Unless the treatment is for preventive care, which may be covered by the HDHP before the deductible is met, you are responsible for the full charge until you have met your deductible. After meeting your deductible, co-payments and co-insurance apply. You may use your HSA funds to reimburse yourself for these qualified medical expenses, tax-free.

Prescription medications are covered expenses under a qualified HDHP, but you will have to meet the deductible before you will be reimbursed by the insurance plan for these expenses. You may use tax-free HSA funds to pay for this expense before the deductible is met.

Some medications, however, are considered "preventive" and as such may be covered under the preventive care provisions of your HDHP. You should check with your plan customer service representatives to determine if your medication is considered preventive.

To receive tax-free distributions, you must establish your HSA before incurring the qualified medical expenses.