What is a Health Savings Account or HSA?

With the rise of high deductible health plans, employers and their employees have begun to increase their utilization of health savings accounts (HSAs) to address their obligations for medical expenses. If an HSA is an available option for you, you should take it, and here’s why.

Health Savings Account FAQ

Health savings accounts allow you to ear mark a designated amount of your pre-tax salary for use to pay approved medical expenses. Given that most people are now subject to higher deductibles, copays, and coinsurances, it is very helpful to ease the burden of financial responsibility for these costs by paying for them with HSA funds. While there is little you can do about changing what you owe, at least you can cushion the blow by paying your medical bills with pre-tax dollars.

Health Savings Account Rules

In addition to deductibles, copays, and coinsurances, HSAs can pay for non-covered medical services, especially out-of-network services, as well as prescriptions, medical devices and some over-the-counter medications. Often employees are given a credit card for access to those funds, making the process easy and seamless. For a complete list of covered expenses, speak to your HR benefits department.

Health Savings Account Qualified Medical Expenses
Examples of qualified expenses for HSA according to the IRS

Use HSA for Acupuncture
Use HSA for Alcohol and drug addiction treatment
Use HSA for Breast reconstruction surgery
Use HSA for Dental treatment
Use HSA for Diagnostic tests and devices
Use HSA for Doctor’s visits
Use HSA for Prescriptions
Use HSA for Eyeglasses, contact lenses and exams
Use HSA for Fertility enhancements
Use HSA for Hearing aids and batteries
Use HSA for Operations/surgery (non-cosmetic)
Use HSA for Nursing services
Use HSA for Physical therapy
Use HSA for Psychiatric care
Use HSA for Smoking cessation

How to use an HSA , Health Savings Account or Health Spending Accounts

One point of warning: be sure to review all medical bills for their accuracy BEFORE providing payment. While the cost to you is minimized by using these pre-tax funds, you want to ensure that the services have been billed correctly and processed completely before you make payment. Be sure to enlist the help of a medical claims advocate who can provide a thorough review of your medical bills. These patient advocates often identify billing errors that result in reduced medical bill costs.