Even though you receive a tax deduction by putting your money into a health savings account, the money is still yours to spend tax free, as long as you spend it on qualified medical expenses. With an HSA-compatible plan, this includes any expenses you incur from going to the doctor, purchasing prescription drugs, or paying other expenses toward your deductible. Once your deductible is met, the health insurance covers your medical expenses as defined in the policy.

In addition to being able to withdraw your money tax free to cover these types of expenses (which might otherwise be covered by a traditional low-deductible high-premium policy), you can use your HSA account to cover other costs that would not normally be covered by a health insurance policy. Below is a list of the most common HSA qualified expenses:

HSA Qualified Expenses

Insurance Premiums That Qualify as HSA Expense

Most insurance premiums do not qualify as a health-savings-account expense, but there are a few including:

• Qualified long-term care insurance
• COBRA or State Continuation health care continuation coverage
• Health care coverage while an individual is receiving unemployment compensation
• For individuals over age 65 — premiums for Medicare A or B, Medicare HMO, and the employee share of premium for employer-sponsored health insurance

Expenses NOT Eligible for under an HSA

The following are expenses that are often mistaken as qualified HSA expenses, but are NOT eligible:

• Health insurance premiums other than those listed above, including Medicare Supplement, Medicare Part D Rx Plans, and Medigap policies
• Life insurance or income protective policies
• The hospital insurance benefits tax, withheld from you pay as part of the Social Security tax or paid as part of Social Security self-employment tax
• Nursing care for a healthy baby
• Travel your doctor told you to take for rest or change
• Cosmetic surgery (unless a wig related to hair loss from disease)
• Teeth Bleaching