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Using an HSA to Pay for Medical Expenses

How a Health Savings Account Could Be Beneficial

You never know how much you’ll end up spending on medical expenses, but you can prepare for expected and unexpected health costs by using a Health Savings Account (HSA). You can start saving pre-tax dollars to pay for qualified medical expenses. Using the funds you set aside in an HSA can lower your overall health care costs.

What is an HSA?

A Health Savings Account lets you decide how much money to put aside each year to cover medical costs. The account gives you control over how and when you spend your funds.

In order to be eligible for an account, you need to be enrolled in a qualified high-deductible health plan (HDHP) as defined by the government. The money you put into your HSA is tax free as long as it is used for medical expenses. The IRS has a list of all qualifying medical expenses you can use HSA funds on. The list includes big expenses like most medical, dental, and eye care. It also includes other health related expenses like crutches, fertility treatments, and physical therapy. HSA funds can also be used for qualifying expenses in retirement, including Medicare premiums after the age of 65.

How to Enroll in an HSA

Before you are eligible to enroll in an HSA, you’ll need to have a high deductible health plan. If you receive health insurance through your employer, you will likely have the option to setup an HSA through your insurance. Make sure to read the fine print on any account you think about using. Some HSAs have fees for opening or closing your account or monthly maintenance fees.

You can also enroll in an HSA plan through certain financial institutions. United Federal Credit Union offers a plan to help members pay for out-of-pocket medical costs. If you are eligible, you will receive a Visa debit card to pay for your qualified medical expenses. There are also no maintenance or yearly fees associated with an HSA through United. While your employer or insurance may change throughout the years, you can always keep your HSA funds secure in your United account.

An HSA is not an option for everyone, though. There are stipulations as to who is not eligible for an HSA:

  • If you are enrolled in Medicare
  • If you were claimed as a dependent on someone else’s tax returns for the previous year
  • If you are covered by another health plan

Putting Money in Your HSA

Once you have an account, you can begin saving for future medical expenses. In recent years, the government has allowed you to contribute about $3,500 for individuals and about $7,000 for family coverage each year. Those limits are subject to change each year. When you reach the age of 55, you are also able to contribute an additional $1,000 each year to your account.

If you do not spend all of the money you saved in one year, don’t worry. The money will roll over year to year and you’ll always have access to it. It may even earn interest, which is not subject to tax.

The Bottom Line

HSAs give you control over how you want to spend your health care dollars. While they are not the right fit for everyone, there are benefits to having an account. If you are interested in opening a Health Savings Account, schedule an appointment to talk with a United Member Service Advisor for more information on how you can get started.

More information on HSAs can be found on