Can I Use Money in My HSA for Something Other than Medical Expenses?

Health Savings Accounts (HSAs) are a great tool for saving money for medical expenses, but can you use the funds for other purposes?

One of the key benefits of an HSA is that the money in the account is tax-free as long as it is used for qualified medical expenses. However, there are some situations in which you may be able to use HSA funds for non-medical expenses:

• If you are 65 or older, you can use HSA funds for any purpose without penalty, although you will have to pay income tax on the funds.
• Some non-medical expenses may be considered qualified medical expenses, such as certain long-term care expenses, COBRA health insurance premiums, and Medicare premiums.
• If you withdraw funds for non-medical expenses before age 65, you will have to pay taxes on the withdrawal as well as a 20% penalty.

It's important to use HSA funds for medical expenses whenever possible to take advantage of the tax benefits. However, knowing the rules around using HSA funds for non-medical expenses can help you make informed decisions about your healthcare savings.

Health Savings Accounts (HSAs) not only help you save for medical expenses but also provide certain flexibilities for using those funds. While primarily designed for health-related costs, it's possible to utilize your HSA money for other purposes under specific circumstances.