How to use an HSA: the basic steps

To use your HSA, you first need to know your account number and how to access it — usually through a website or mobile app provided by your HSA custodian (the bank or financial company holding the account). When you have a medical expense, you pay for it out of pocket with your regular debit card or cash, then request reimbursement from your HSA by submitting a claim form and a receipt or invoice showing what you paid for.

Some HSAs let you use a debit card linked directly to the account, which skips the reimbursement step entirely. Others require you to pay first and submit paperwork later. Check with your HSA provider to see which method they offer — it's usually spelled out in your account welcome materials or on their website.

The money you withdraw must go toward a may have access to medical expense. The IRS has a specific list of what counts: doctor visits, prescriptions, dental work, vision care, medical equipment, and many other treatments. Non-medical expenses — like cosmetic surgery, gym memberships, or over-the-counter vitamins — do not may have access to and will trigger taxes and penalties if you withdraw money for them.

Key Takeaways

  • You can pay for may have access to medical expenses out of pocket and then request reimbursement from your HSA, or use an HSA debit card to pay directly if your provider offers one.
  • Only expenses on the IRS may have access to list — doctor visits, prescriptions, dental, vision, and medical equipment — can be paid from your HSA without tax penalties.
  • Keep all receipts and invoices for at least three years, because the IRS can audit your HSA and ask you to prove that withdrawals were for may have access to expenses.
  • You can leave money in your HSA year to year; unused funds roll over and earn interest or investment returns depending on your account type.
  • After age 65, you can withdraw money for any reason without penalty, though non-medical withdrawals are still taxed as income.

What counts as a may have access to medical expense

The IRS maintains a long list of may have access to expenses, and it covers far more than just doctor visits. Prescriptions, copays, deductibles, dental cleanings and fillings, eyeglasses and contact lenses, hearing aids, crutches, wheelchairs, and insulin are all may have access to. Physical therapy, mental health counseling, and many over-the-counter medical items — like bandages, pain relievers, and allergy medicine — also count if you have a prescription or doctor's note for them.

What does not count: cosmetic procedures (unless medically necessary), gym memberships, vitamins and supplements without a prescription, over-the-counter cold medicine, toothpaste, and most personal care items. If you are unsure whether a specific expense qualifies, ask your HSA provider or check the IRS Publication 502, which lists hundreds of examples.

One important rule: you cannot use HSA money to pay for health insurance premiums while you are working — with narrow exceptions for COBRA, long-term care insurance, and Medicare premiums after you turn 65. Using HSA funds for regular health insurance premiums while employed will trigger taxes and a 20% penalty on the withdrawal.

How to request reimbursement and keep records

If your HSA does not have a debit card, you will need to submit a reimbursement request. Most HSA providers have an online portal or mobile app where you can upload a photo of your receipt or invoice, fill out a simple form with the date and amount, and request the money be transferred to your bank account. Some providers also accept paper claim forms mailed in.

The reimbursement usually takes three to five business days to arrive. Keep the original receipt or invoice — do not throw it away after you submit it. The IRS can audit your HSA at any time and ask you to prove that the money you withdrew was actually spent on may have access to expenses. You should keep records for at least three years, though keeping them longer is safer.

If you cannot find a receipt, some HSA providers will accept a written statement from the provider (like your doctor's office) confirming the date and amount of the service. Call your HSA provider to ask what documentation they will accept before you assume a missing receipt means you cannot get reimbursed.

Using an HSA debit card

If your HSA provider offers a debit card, you can use it to pay for may have access to medical expenses directly at the point of sale — at a pharmacy, doctor's office, or medical supply store. This skips the reimbursement paperwork and gets you the money immediately. However, not all HSA providers issue debit cards, and some charge a monthly fee for the service.

The downside of an HSA debit card is that it can be harder to track what you spent the money on, especially if you use it for multiple small purchases. You still need to keep receipts and be able to prove that every purchase was may have access to if the IRS audits you. Some HSA providers require you to submit receipts even when you use the debit card, so check your account rules before you rely on the card as your main payment method.

Investing HSA money and letting it grow

Unlike a flexible spending account (FSA), an HSA does not have a "use it or lose it" rule. Money you do not spend in one year stays in the account and rolls over to the next year. This means you can let your HSA grow over time, which makes it a powerful long-term savings tool for retirement medical expenses.

Many HSA providers let you invest the money in mutual funds, stocks, or other investments, similar to a 401(k) or IRA. The money grows tax-free, and when you withdraw it for may have access to medical expenses, you pay no taxes on the growth. This is one of the biggest advantages of an HSA over other savings accounts — the tax benefit applies to the earnings, not just the contributions.

If you choose to invest your HSA money, keep in mind that investment returns are not may provide and the account value can go down as well as up. Many people keep a smaller amount in cash (for immediate medical expenses) and invest the rest for long-term growth. Ask your HSA provider what investment options they offer and what fees they charge.

What happens to your HSA if you change jobs or leave your employer

Your HSA belongs to you, not your employer. If you leave your job, change employers, or retire, the account stays yours and you keep all the money in it. You do not lose the balance, and you do not have to spend it by a certain date. This is very different from an FSA, which you usually lose if you leave your job.

After you leave your employer, you may need to move your HSA to a new custodian if your old employer's plan closes the account. Some employers allow you to keep the account open with the same provider; others require you to roll it over to a bank or financial company of your choice. Contact your HSA provider before you leave your job to find out what happens to your account.

You can also roll money from one HSA to another HSA without penalty, similar to rolling over a traditional IRA. This is useful if you want to move to a provider with lower fees or better investment options. You are allowed one HSA-to-HSA rollover per year, and it must be completed within 60 days.

HSA withdrawals after age 65

Once you turn 65, the rules change. You can withdraw money from your HSA for any reason without the 20% penalty that normally applies to non-may have access to withdrawals. However, non-medical withdrawals are still taxed as regular income, just like withdrawals from a traditional IRA.

This makes an HSA a useful retirement savings account if you do not spend all the money on medical expenses while you are working. You can let it grow for decades, use it for medical expenses when you need to, and then withdraw the rest for any purpose after 65 — paying income tax but no penalty. If you do use the money for may have access to medical expenses in retirement, there is no tax at all.

Frequently Asked Questions

Can I use my HSA to pay for my spouse's or child's medical expenses?

Yes, as long as they are covered under your health insurance plan or you claim them as dependents on your tax return. The expense must still be may have access to, and you need to keep receipts. If your spouse has their own HSA, they can also use their own account for their expenses.

What happens if I withdraw money from my HSA for a non-may have access to expense?

You will owe income tax on the amount withdrawn, plus a 20% penalty. For example, if you withdraw $500 for a non-may have access to expense and you are in the 22% tax bracket, you will owe $110 in taxes plus $100 in penalties — a total of $210. After age 65, the penalty goes away but the income tax remains.

Can I use my HSA to pay for health insurance premiums?

Not while you are employed and covered by your employer's health plan. You can use HSA money for COBRA premiums if you lose your job, and for Medicare premiums after you turn 65. You also can pay long-term care insurance premiums from your HSA.

Do I have to use my HSA every year or do unused funds roll over?

Unused funds roll over indefinitely. There is no deadline to spend the money, and no "use it or lose it" rule like an FSA has. This is why an HSA can grow into a large retirement savings account over time.

What should I do if I cannot find a receipt for a medical expense I paid from my HSA?

Contact your HSA provider and ask what documentation they will accept. Many providers will accept a statement from the medical provider confirming the date and amount of service. Keep trying to locate the original receipt, because the IRS may ask for it during an audit.