Can I Use an HSA to Build a Non-medical Emergency Fund?

Building an ideal emergency fund is not an easy feat. It takes commitment to a budget and some discipline not to spend the money you’ve worked so hard to save. Most HSA users believe that unused HSA dollars provide for a great way to cover unexpected, eligible medical costs, which is true, but there’s more. What if we told you that you can use these funds for non-medical emergencies, too? If you’re looking for an easier way to build an emergency fund with the help of your HSA, we have a solution for you.

About 30-35% of all HSA users focus on funding their HSAs to spend a budgeted amount on certain qualified medical, dental, or vision expenses and retain a portion of those dollars as “back-up” savings. This means planning your annual spend, and accounting for a portion of dollars that will remain in the account at the end of each year. Here’s where the solution comes in: purchasing eligible items out of pocket and saving receipts. 

By purchasing eligible products out of pocket (meaning with a regular credit card, debit card, cash, or in other words, not with your HSA) you are allowing more of your pre-tax dollars to grow untouched. This gives your savings a big boost thanks to tax-free interest accrual. Saving receipts is how you can instantly withdraw the pre-tax dollars you need from your account in the event of an emergency. Let’s break it down: 

Budgeting & saving receipts

You don’t have to start buying everything out of pocket right away, but remember, the less you disrupt your HSA balance, the more it will grow. Plan out a budget that works for you and your qualified dependents’ needs. 

When considering what you start to pay for out of pocket, know that every eligible expense including your current essentials, certain medical services, and thousands more products you never knew existed, are fair game here. Start exploring just how many of your everyday essentials and medicine cabinet favorites are eligible for reimbursement. The best place to start is with our Eligibility List — the web’s most comprehensive list of products and services eligible for tax-free spending. 

Once you’ve done this, simply continue to buy your eligible essentials out of pocket. HSA Store carries all of your favorites with a 100% eligible guarantee from eligible pain relievers to sunscreen, and much more. It gets better. We even help you track and store all of your receipts from purchases made at HSA Store in one safe place: our Expense Dashboard.

Getting HSA reimbursement right

From this point, if you ever need to pull funds from your HSA for any purpose, you can request a reimbursement from the HSA into your checking account, for any amount you have as "Eligible for Reimbursement" (assuming you have that amount in your HSA)

  • Match up the amount you pulled to receipts to expenses you paid out of pocket
  • With our Expense Dashboard, you can keep easy records: simply mark the items as "Reimbursed from HSA" and your "Eligible for Reimbursement" value is automatically updated

So, the next time a medical or non-medical emergency arises (fingers crossed one never does), simply request a reimbursement from your HSA into your checking account (as long as your "Eligible for Reimbursement" amount is equal to or higher than the amount you need). Once you receive the funds into your checking account, just mark the items as "Reimbursed from HSA" in your Expense Dashboard, and voila: a foolproof back-up plan, powered by your HSA’s pre-tax dollars. 

Note, we are not tax professionals, nor should this article be considered professional tax or financial advice. To find the best solutions for your needs, be sure to speak to a qualified tax or financial professional before making any decisions.


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