Getting the most from your HSA
Account can be used for more than you think.
Most of us probably zone out during our employer’s health benefits presentation. By the time we get to the health savings account (HSA) slide, we’re either half asleep or thinking about lunch.
Or, we just plain don’t understand the purpose of putting money into a separate account that we think can be used only for doctor’s visits and medical emergencies.
Guess what? You can use your HSA money for a lot more than emergency room visits.
We’re talking everything from sunscreen and contact lens solution to baby monitors and wheelchairs.
“You can also use it for flu shots ... drug prescriptions and even over-thecounter medicine like Sudafed,” says Chris Hogan, author of “Retire Inspired: It’s Not an Age; It’s a Financial Number.”
“I would go and buy cold medicine (and) things of that nature during the fall getting ready for the winter and just use my HSA card.”
What is an HSA?
An HSA is an account you deposit money in for health-related expenses. The best part: When paired with a health insurance plan, the money is deposited tax-free. It also earns tax-free interest.
The tax-advantaged status of an HSA is what makes it significantly better than setting money aside in a regular savings account for medical emergencies, Hogan says.
“You’re putting that money in pretax, and that money is growing taxfree,” he said. “That benefit in savings is larger than any kind of growth in a savings account, which is typically a quarter percent.”
What can you buy using your HSA account?
Hogan is a fan of HSAs because, along with medical products, they can pay for things beyond what your health insurance covers. If you hurt your knee and your physician recommends physical therapy, your insurance may pay for only six visits, while your HSA can be used to pay for however many sessions you need.
Roy Ramthun, founder of AskMrHSA.com, says HSAs also can cover dental work, eye exams, glasses and contacts in case your primary insurance plan doesn’t include dental and vision services.
HSAs even can be used to cover mileage to and from your doctor’s appointments, Ramthun says. If your doctor says you need to outfit your home with air filters because of your severe allergies, your HSA can pay for those, too.
Here’s the warning: Not all HSAs cover the same things.
And while the IRS covers HSA regulations in its Publication 969, there isn’t a convenient master list of items that can be purchased with the tax-free accounts. So, it’s the best practice to double-check with your provider before spending your HSA money.
Retailers such as Amazon and Walmart make it easy to use
Walmart has an HSA Shop landing page on its website. It allows users to order items such as bandages, vitamins, glucose monitors and thermometers. Walmart doesn’t currently accept HSA cards as a payment method, though, so customers who buy items from its HSA Shop use a credit or debit card and then submit an order receipt to their plan administrator for reimbursement.
In 2018, Amazon began accepting HSA debit cards as a form of payment for approved items including pregnancy tests, first-aid kits and back-support belts. You even can limit your searches by selecting the “HSA Eligible” filter.
“Customers can easily find over tens of thousands of eligible over-thecounter health care products, add them to their cart and seamlessly pay with their benefit account debit cards,” an Amazon spokesperson said via email.
There also is an entire website dedicated to HSA-approved items called HSAstore.com, where you can find a plethora of things including condoms, neck pillows and callus removers.
An HSA can be used for non-medical expenses, but it will lose the tax-free perk
For people who don’t generally get sick or spend a lot on medical expenses, an HSA can still prove beneficial.
You can withdraw money from your HSA for non-medical things, but Hogan doesn’t recommend it. If you use your HSA to pay rent or get a dye job, you will be taxed. To avoid needing to pull money out of your HSA for such expenses, Hogan suggests having three to six months’ worth of living expenses saved.