HSA Quick Tips



  • Health Savings Accounts are made of two components:  A high deductible health plan (HDHP) and a Health Savings Acount (HSA).  You must leverage both components for maximum benefits.
  • Health SAvings Accounts (HSA’s) are the most tax advantaged account ever created (3 tax advantages in 1 account). Tax deductible, tax deferred growth, and tax free distribution.  Make sure you take advantage of it to it’s fullest, and see our HSA Savers section of this website.
  • Only expenses that occurs AFTER you set up the actual Health Savings Account at a financial institution, are eligible for a tax free distribution.  Set one up as soon as the health plan is effective.
  • You can use your HSA money tax free for medical expenses for your other dependents whether or not they are on the health insurance.
  • Your money rolls over each year, and for the rest of your life.  It is NOT a “use it or lose it” account.
  • You can use your HSA like an IRA after age 65.  At that age, you avoid the 20% penalty, but you will pay income taxes on the distribution, just like an IRA.   Still tax free for the rest of your life for eligible medical, dental, and vision expenses.  So, money you put in an HSA will be used at some point over your lifetime.
  • Remember to keep all receipts for at least 5-7 years in case the IRS wants to verify you spent the money tax free on eligible expenses, or keep them to reimburse yourself tax free in future years.
  • You can collect all receipts during the year, and reimburse yourself once at the end of the year.
  • ACA, the new health reform law, increased the HSA penalty from 10% to 20% in 2011.
  • If you are over age 55, you can do a “catch up” contribution for an extra $1000 each year into your HSA.
  • You can invest your Health Savings Account in any investment that an IRA allows.
  • If you don’t keep an eye on fees, you can lose money in your HSA in a low interest rate environment.
  • If you can find a test or procedure cheaper than the negotiated network discount, your insurance company will possibly allow you to put that towards your health plan deductible.