By Ella Vincnet From Kiplinger’s Personal Finance
Question: I have a high-deductible health insurance policy that makes me eligible to contribute to a health savings account (HSA). Is there a deadline for using HSA money, or can I withdraw it any time in the future? What are some benefits of the HSA?
Answer: A health savings account is a remarkable tool to help pay for out-of-pocket medical expenses. HSAs offer a triple tax advantage: Contributions are tax-deductible (up to $4,300 for self-only coverage and $8,550 for family coverage in 2025, plus an extra $1,000 if you’re 55 or older), growth from the account’s investments is tax-deferred, and withdrawals are tax-free for eligible expenses. There is no deadline for using the HSA money. You must have a qualifying high-deductible health insurance plan to fund an HSA.
Reimbursement options. You can use HSA money for out-of-pocket expenses including insurance deductibles and copayments, as well as items ranging from pain-relief medication to bandages to hearing-aid batteries. For a list of qualifying expenses, go to www.healthequity.com/hsa-qme. If you make a non-qualified withdrawal, you’ll owe income tax on it, plus a 20 percent penalty if you’re younger than 65. After you turn 65, you’ll owe income tax but no penalty.
Unlike flexible spending accounts, HSAs don’t impose a deadline by which you must use the funds, and you can get reimbursement for qualifying medical expenses at any time. For example, you could claim HSA funds years from now for a medication you buy today, as long as you owned the HSA when you made the purchase.
The ability to hold on to HSA funds over the long term is valuable. If you can afford to avoid tapping your HSA during your working years, the account may grow significantly from your contributions and investment earnings; HSAs typically allow you to invest in stocks, mutual funds and other securities. In retirement, you can use HSA money to pay for qualifying medical expenses, including premiums for Medicare Part B, Part D, and Medicare Advantage after you turn 65, even though you can’t make new HSA contributions after enrolling in Medicare.
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When you’re ready to claim HSA money, you may be able to go to your provider’s web portal and transfer funds to your checking or savings account. In addition, some HSA providers allow you to write yourself a check from your account.
If your HSA comes with a debit card, you can use it to make eligible purchases directly—for example, at pharmacies or doctors’ offices. And depending on your HSA provider, you may be able to withdraw funds from an ATM to reimburse yourself for out-of-pocket medical expenses.
Tracking the paperwork. Even if your HSA administrator doesn’t require you to submit receipts for reimbursement, it’s a good idea to hang on to them, says Michael Eldredge, product manager for HSA provider Inspira Financial. You’ll need them for your tax records in the event you’re audited. If your doctor provided letters of medical necessity for certain purchases, save the letters in case your HSA provider or the IRS requests proof the expenses were eligible, says Itamar Romanini, vice president and general manager of online retailer HSA Store.
By holding on to payment records, you can keep track of any expenses that you don’t claim right away, too. Store receipts and explanations of benefits in a safe place at home or save them digitally. HSA Store’s free ExpenseTracker Mobile App (https://hsastore.com/expensetracker-app.html) lets you store and upload images of receipts. With TrackHSA (www.trackhsa.com; $1 a month after a 30-day free trial), you can upload receipts and organize expenses by year so that you can easily find them later.
©2025 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.
The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
