Things You Can Pay for With an HSA

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Contributor, Benzinga
February 18, 2022

A health savings account (HSA) allows you to pay for many things that otherwise wouldn’t get covered through your health insurance plan. You can purchase many healthcare-related items and treatments with your HSA funds, including things as basic as bandages and antiseptics. However, you may want to prioritize a few things to purchase first to ensure you’re using your HSA funds in the most effective way possible. 

What is an HSA?

A health savings account is tax-advantaged savings account that allows you to set money aside to use for certain medical expenses. It can be used to lower healthcare costs by using the untaxed dollars in the HSA to pay for copayments, coinsurance, deductibles and other healthcare expenses. An HSA is typically can’t be used to pay for your health insurance premiums, but you can use the funds to cover select expenses that are not covered under your health insurance or that you’d normally need to pay out of pocket. 

This medical savings account is available to people enrolled in a qualifying, high-deductible health plan, also known as an HDHP. An HDHP plan has a deductible of at least $1,400 for individuals and $2,800 for families. HDHP plans are typically combined with an HSA to help those paying high deductibles save more money to put toward their care costs. However, not all high-deductible plans qualify you for an HSA. 

When you choose your health insurance plan, make sure that you can enroll in an HSA program. The insurance industry is filled with twists and turns, and your health insurance options could prove to be confusing.

Once you get an expense approved, you are can use an HSA-approved debit card to make the purchase. The purchase can be made at a doctor’s office, pharmacy or another approved location. HSA accounts can be provided through an employer, but if your employer doesn’t offer a high-deductible plan, you can open an HSA on your own. You also can open an HSA through a bank, investment company that deals in HSA administration or a credit union. 

The Benefits of an HSA

A health savings account can help you take control of your healthcare needs. It can also help your financial wellness because there are many tax advantages associated with it. Your health care coverage is often not as straight forward as you might imagine, and that’s why you should ask questions about your insurance plan before paying. A few of the top benefits of an HSA include: 

Tax advantages: An HSA is a tax-advantaged savings account. The contributions to your HSA are made before taxes, typically via a payroll deduction through your employer, which lowers your taxable income. Because your taxable income is lowered, you pay less in federal income taxes because the amount of money you pay into the account is not considered in the calculation of your gross income. In some states, you may still need to pay state income taxes on money you put into your HSA account. 

Save on medical expenses: HSA funds can be used to pay for a number of medical expenses that may not be covered by your health coverage, including copayments and deductibles. Because you can pay for these expenses with HSA funds, you’re saving on medical expenses and taxes at the same time. The expenses you pay with HSA funds must be eligible, as not all expenses are covered by these funds. Many account holders are surprised at how many items — ranging from sunscreen to birth control — are covered under HSA rules. 

Tax-free interest: The money in your HSA account earns interest. Because the funds you put into the account are pretax, the interest is earned tax-free as well. This can help you defray insurance costs and pay into your health care much more readily.

The funds never expire: The funds in an HSA do not expire, even if you switch jobs or plans. If you do not use all funds in one year, they roll over to the following year, unlike a flexible spending account (FSA). You can decide what you want to do with the funds and never have to worry about losing the money because it is yours forever, even if you don’t use all of your funds in a year. This makes your HSA a suitable investment vehicle as well as a resource to lower your healthcare costs. 

You can invest your HSA funds: You can invest your HSA funds once you reach a certain balance in your account. A portion of the funds can be invested in stocks, mutual funds and bonds. The investment is up to you, which means you have control over the percentage of funds you divert into market assets. Remember, your insurance coverage is completely separate from this account, meaning that these investments are not impacting your services. 

Save for retirement: When you reach age 65 — typically around retirement age — the funds in your HSA can be used for anything penalty-free. You can continue to use the funds for eligible medical expenses, but you can also withdraw money to use for other expenses without paying a penalty. 

4 Items You Can Purchase With an HSA

You can use HSA funds to pay for many medical expenses. Items eligible for coverage can be basic or necessities. Medical expenses that qualify for coverage range from hospital services and over-the-counter medications to therapy and insulin. Items typically covered by HSA funds are not generally covered by your health insurance. 

Below, you can explore four examples of items you can pay for with HSA funds. These are examples of some of the most common items HSA owners use their funds for and do not represent a comprehensive list of eligible benefits. 

Birth control: Birth control falls under the family planning category, which allows it to be an eligible expense that HSA funds cover. This is true no matter which type of birth control method you use. 

Contact lenses: While your health insurance provider may not cover your contact lenses, they are eligible to be covered by HSA funds. This can be beneficial if you have an Affordable Care Act (ACA)-compliant plan that does not provide vision insurance benefits

Air purifiers: You can purchase an air purifier with HSA funds if you provide a letter from a healthcare provider saying that it is a necessity for your health. If the air purifier is not being used to alleviate or treat a medical condition, it is not considered a medical necessity and therefore is not eligible. However, if you live in an area with particularly poor air quality and you suffer from recurring respiratory illness, you’d likely be eligible to use your funds for this expense. 

Orthotics, braces and wraps: Many expenses eligible for coverage with HSA funds are things that your basic healthcare insurance does not cover. Orthotics, braces and wraps are just a few items that are covered by an HSA but that your regular health insurance will not cover.  

Compare Health Insurance

Benzinga offers insights and reviews on the following health insurance providers. You may want to begin your search for the right provider using a few of the links below. 

  • securely through Blue Cross Blue Shield Health Insurance's website
    securely through Blue Cross Blue Shield Health Insurance's website
    Best For:
    Nationwide coverage
    Read Review
  • securely through Sidecar Health Access Plan's website
    securely through Sidecar Health Access Plan's website
    Best For:
    No enrollment period health insurance
    Read Review

    Plans referred to above are excepted benefit fixed indemnity insurance products marketed and administered by Sidecar Health Insurance Solutions, LLC and underwritten by Sirius America Insurance Company or United States Fire Insurance Company, depending on the state. As an excepted benefit plan, it does not provide comprehensive/major medical expenses coverage, minimum essential coverage, or essential health benefits. You cannot receive a subsidy (premium tax credit and/or cost-sharing reduction) under the ACA in connection with your purchase of such an excepted benefit fixed indemnity insurance plan. Also, the termination or loss of this policy does not entitle you to a special enrollment period to purchase a health benefit plan that qualifies as minimum essential coverage outside of an open enrollment period. Coverage and plan options may vary or may not be available in all states.

  • Best For:
    Access to Kaiser medical specialists
    Read Review
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    Same day coverage available
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Saving More for Health Expenses

Don’t confuse an HSA with an FSA. Unlike an FSA, the funds in your HSA roll over from year to year, which means there’s no rush to use all your benefits before the end of the year. This also means you can use your HSA as a vehicle for retirement saving and investing, especially as a complement to other retirement accounts. 

Frequently Asked Questions


Who is eligible for an HSA?


According to the IRS, to be eligible for an HSA, you must be covered under a qualifying HDHP health plan, have no other health coverage aside from what is permitted by the IRS and not be enrolled in Tricare, Tricare for Life or Medicare. You also cannot be claimed as a dependent on another person’s tax return and cannot have received Veterans Affair benefits within the last three months.


What is the benefit of having an HSA?


Benefits of having an HSA include the ability to lower your taxes, pay for more healthcare expenses and save for retirement. Having an HSA helps reduce your taxable income while saving for future medical expenses, which can be a major benefit for anyone with recurring health expenses.