A health savings account or HSA is a fantastic savings account for medical expenses, both for today and the future. The account balance (your money) can be used tax-free for qualified medical expenses. Those expenses are typically what you would expect: surgery, ambulance, doctor visit copays, subscription medications, etc. However you can also use your HSA balance for things such as chiropractor visits, hearing aids, eye glasses, dental treatments and physical therapy and many others. Make sure to double check with the IRS or your provider if you have questions.
These qualified medical expenses never expire. This means that if you pay out-of-pocket for any expenses, you can reimburse yourself at any time for those expenses. Just make sure to save receipts!
Health Savings Account dollars cannot typically be spent towards your health coverage premiums. However, you can use your HSA for long-term care insurance premiums and medicare premiums. That is an amazing opportunity to save now for the future.
You can always take the money out of your HSA at any time. However you will pay ordinary taxes and a 20% penalty on any withdrawal that is not for a qualified medical expense. This penalty is waived if you are over 65, permanently disabled or die.
Mike Morton is a fee-only financial advisor based in Harvard, MA. Find out more: [ Ссылка ]
