Can HSA Pay a Bill from Prior Year? Learn How HSA Works for Previous Expenses

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. But can an HSA pay a bill from a prior year?

Yes, an HSA can be used to pay for eligible medical expenses incurred in previous years, even if the expenses occurred before you opened the HSA account. Here's how it works:

• HSAs offer a lot of flexibility in using the funds saved in the account.
• Any qualified medical expense that was incurred after the HSA was established can be paid from the HSA funds.
• Keep all receipts and documentation for previous expenses to provide proof in case of an audit.

So, if you had a medical bill from last year that meets the IRS criteria for qualified medical expenses, you can use your HSA funds to pay for it. This can be particularly helpful in managing unexpected medical costs from previous years.

Health Savings Accounts (HSAs) not only allow you to save for current medical expenses, but they also provide a unique flexibility that lets you reimburse yourself for qualified medical expenses from prior years. So, if you've kept those receipts, you're in luck!