How can I use my HSA?

Who is this for?

Michigan Health Insurance – Customer Service – Health Spending Accounts

If you have a plan with a health savings account, or HSA, this information can help you figure out how to use it to pay for medical expenses.

You can use the money in your HSA to pay for qualified medical expenses. Your account usually comes with a debit card or checks. If you don’t have enough money in your account at the time you need to pay, you could pay out of pocket. Once you have enough money in your account, you can choose to be reimbursed.

Also, once you have a certain amount in your account, you can invest the money in stocks bonds and mutual funds — just like an IRA.

What expenses can I pay with my HSA?

You can use your HSA to pay for qualified medical expenses, which are determined by the IRS. Because you own the account, you can use it to pay for any of those expenses.

You can also use it for things other than qualified medical expenses. However, you'll have to pay income taxes on that amount and a 20 percent tax penalty if funds are withdrawn for non-qualified medical expenses. You can't use the money in your HSA to pay for medical insurance premiums, except for special circumstances such as disability or loss of employment, or during your retirement.

According to the IRS, you can use your HSA to pay for:

  • Eligible medical expenses, including most medical, dental and vision services and prescription drugs. 
  • Health insurance premiums under COBRA continuation coverage.
  • Health insurance premiums if you’re getting unemployment compensation.
  • Medicare Part A or Part B premiums if you’re enrolled in Medicare.
  • Your qualified long-term care insurance premiums.

How do I open an HSA?

Most of our members open their health savings accounts through us. But you can also open an HSA at most banks, credit unions, insurance companies and other financial institutions. Employer-sponsored health plans that pair with an HSA may partner with a bank you use.

How can I track my HSA?

If you have a Blue Cross Blue Shield of Michigan PPO or Blue Care Network HMO plan with a HealthEquity® HSA, you can track your HSA by logging in to your account. You can view your balance, claims and contributions all in one place.

Can I use the account for my family?

Yes, you can use the money you have in your HSA to pay for medical expenses for family members if they're taxable dependents. 

What happens to my account at the end of the year?

You are the owner of your HSA funds — that means at the end of your plan year all the money stays with you. Even if you switch jobs or enroll in a plan that isn’t HSA-compatible, you can still use your HSA money.

Tip: Keep your health care-related receipts in case of a tax audit.

What happens to my account when I retire?

When you turn 65 and enroll in Medicare, you can’t contribute to your HSA anymore. But you can keep using your account tax-free for qualified out-of-pocket health care expenses.

You can also:

  • Pay your Medicare premiums, deductibles, copays and coinsurance
  • Pay your share of retiree medical insurance premiums through your former employer

Tip: You can't pay for Medicare supplemental insurance or a Medigap policy with money from your HSA.