A health savings account, or HSA, can lower the cost of health care. Individuals with HSAs save money by having high-deductible health insurance policies and by paying medical expenses with tax-free earnings.
Restrictions
To avoid tax penalties, HSA account holders must use their funds to pay only for qualified medical expenses. The IRS defines qualified medical expenses as those related to the prevention or treatment of a physical or mental disease or health problem.
Dental Care
The cost of dental care, including X-rays, fillings, teeth cleaning and braces, can be paid for with HSA funds.
Medical Exams
The costs of diagnostic exams, such as lab tests or annual exams, are approved HSA medical expenses.
Family Members
Health savings accounts also cover medical expenses incurred by spouses, children or qualified dependents.
Medicine
HSA funds can be used to pay for both prescription and nonprescription medicines. However, the cost of insulin cannot be paid with HSA funds.
Tags: medical expenses, paid with, paid with funds, qualified medical, qualified medical expenses
