How Health Savings Accounts Work

An HSA is a savings account that allows you to put money aside on a pre-tax basis for qualified medical expenses. It’s available to members who are enrolled in a high-deductible health care plan.

You can use the funds in your HSA to pay for qualified medical expenses. For a complete list of qualified medical expenses, visit

Contributions to your HSA are tax deductible up to the limits set by the IRS. Those 55 and older can make an additional catch-up contribution of $1,000 to their HSA.

What Is The Difference Between An HSA And A Flex Spending Account?

Unlike and Flex Spending Account, you will not lose the funds in your HSA if you do not use them. The funds in your HSA will carry over from year to year.

Quick Facts

  • An HSA can pay for prior year medical expenses.
  • An HSA can grow from year to year.
  • Many financial institutions offer checks or debit cards you can use to pay for expenses.

Who Qualifies?

According to, you must meet the following requirements to qualify for an HSA:

  • You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
  • You have no other health coverage except what is permitted under Other health coverage.
  • You aren’t enrolled in Medicare.
  • You can’t be claimed as a dependent on someone else’s prior year tax return.

You Can Pay for Expenses With Checks, Debit Cards, or Bill Pay Services

Many banks and credit unions offer bill pay, checks, or debit cards that you may use to pay for qualified medical expenses. These features offer easy access to your account funds, including reimbursing yourself for expenses you have already incurred. Be aware that some of these features have associated fees, especially when using a debit card to withdraw “cash” from your HSA.

What Happens To My HSA If I Am No Longer In A High Deductible Health Care Plan

You will not lose the funds in your HSA and you can continue to use your funds for qualified medical expenses. However, you will not be able to make contributions to your HSA.

An HSA can be an incredibly useful fund. If you want to learn more about the features of Connexus HSAs, you can check out our page here.