Can HSA be Used for Expenses from Prior Year?

Health Savings Accounts (HSAs) are a valuable tool for managing healthcare expenses and saving for the future. One common question that arises is whether HSA funds can be used for expenses from prior years.

Unfortunately, HSA rules do not allow for reimbursement of expenses incurred in prior years. HSA funds can only be used to pay for qualified medical expenses that occur after the HSA was established.

However, there are some exceptions and important details to keep in mind:

• HSAs roll over from year to year, so funds are not lost at the end of the year. This allows HSA account holders to save and accumulate funds for future medical expenses.
• If you incur a qualified medical expense but do not have enough funds in your HSA at that time, you can reimburse yourself once you have sufficient funds in the account. Just be sure to keep records and receipts to substantiate the expense.
• If you have an HSA through an employer and you leave that job, you can still use the HSA funds for qualified medical expenses, even if they were incurred while you were employed.

It’s important to understand the rules and limitations of HSA contributions and withdrawals to make the most of this valuable healthcare resource. While you can’t use HSA funds for expenses from prior years, proper planning and utilization of your account can help you cover current and future medical costs.

Health Savings Accounts (HSAs) are an incredible financial tool, but many wonder if they can tap into those funds for medical expenses from previous years. Unfortunately, the answer is no; HSAs are designed to reimburse medical costs incurred after the establishment of the account.