Compliance Connection

Common Questions about Health Savings Accounts (HSAs)

Medical costs can be overwhelming, but if you have a qualified High Deductible Health Plan (HDHP), setting up a Health Savings Accounts (HSA) may be a great way to offset that financial uncertainty. HSAs can help you pay for eligible medical expenses while providing many financial benefits.

Considering setting one up? Or have questions regarding your existing account? Below are answers to common HSA questions.

Is the money “use or lose”?

Money deposited into your HSA will be there whenever you need it. Unused funds will roll over to the next year, so you won’t lose your contributions.

Can I invest my HSA funds?

Yes! HSAs provide an opportunity to invest in mutual funds and help you save for retirement.

Do I need to keep my receipts?

Yes, you are responsible in case of questions or audit by the Internal Revenue Service (IRS) to prove distributions for eligible medical expenses. Because money taken out of your HSA tax free may only go towards eligible medical expenses, it’s best to keep documentation in case of potential audit. While you will not need to submit receipts with your income tax returns, you should hold on to them!

Column Provided by: Tom Sledge, Arkansas State Manager, American Fidelity Assurance Co.