How can I use my HSA?

Who is this for?

Michigan Health Insurance – Customer Service – Health Spending Accounts

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

You control how you spend money in your HSA. You can use it to pay for qualified medical expenses. You can also use it for things other than medical expenses, but you'd have to pay a penalty. Typically, your account will come 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 the HSA you can be reimbursed.

If you use money in your HSA for something other than a qualified medical expense, you'll have to pay income taxes on that amount. And, you'll have to pay a 20 percent tax penalty, unless you're disabled or over age 65. Generally you can’t use the money in your HSA to pay for medical insurance premiums.

Once you have a certain amount in your account, you can invest the money just like you would with an IRA. You can invest it in stocks, bonds and mutual funds.

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 compatible with an HSA may partner with a bank you can use.

If you open an HSA through us, you can see your claims and pay your provider with funds from your HSA, all in one place.

What medical 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. 

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, even if they aren’t on your plan. You can always use it to pay for your spouse's expenses. If your children qualify as dependents on your tax return, you can pay for their expenses with your HSA, too.

What happens at the end of the year?

You are the owner of your HSA funds. That means that 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 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 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.