Can I Pay with My HSA for a Third Party?

One common question people have about Health Savings Accounts (HSAs) is whether they can use their funds to pay for expenses of a third party. The answer is not so straightforward, but let's break it down.

Generally, HSA funds are intended for qualified medical expenses for the account holder, their spouse, and dependents. However, there are some exceptions when it comes to using your HSA for a third party:

• If you are the primary account holder, you can use your HSA to pay for medical expenses of your spouse or dependents, even if they are not covered by your high-deductible health plan.
• If you are not the primary account holder, but you are listed as a dependent on someone else's tax return with an HSA, then that account owner can use their HSA funds to pay for your qualified medical expenses.
• For parents, you can use your HSA to pay for your child's qualified medical expenses, even if they are not claimed as a dependent on your tax return.

It's important to keep detailed records and receipts for any third-party expenses paid for with your HSA funds to ensure compliance with IRS regulations.

Many people wonder about the flexibility of Health Savings Accounts (HSAs) when it comes to covering expenses not just for themselves, but for others as well. Understanding the rules governing HSA usage can be quite enlightening.