learn how changes to HSA accounts in 2022 can impact your family

Changes to HSA Accounts: How to Create a Spending and Saving Strategy for 2024

A new year is always a great opportunity to come up with a new HSA spending and saving strategy. As your HSA is an account you can pull money from, it's important to see how it fits into your overall financial plan.

A bright spot during the otherwise gloomy COVID-19 pandemic was that qualified health expenses for HSAs have expanded. With the passage of the CARES Act in 2020, and the IRS declaring PPE eligible in 2021, there has been greater flexibility in what is eligible in terms of HSA spending. Here's what has changed:

Expansion of eligible medical expenses:

  • HSA can now reimburse the cost of menstrual care products — think sponges, cups, liners, pads, and tampons
  • A prescription is no longer needed to purchase over-the-counter drugs and medicines with your HSA funds
  • Personal protective equipment (PPE) such as masks, hand sanitizer, and sanitizing wipes to prevent the spread of COVID-19 became HSA eligible expenses

Make sure to hold on to your receipts for any or all HSA eligible medical expenses. Whether you keep them in a stack and stash them in a safe place, or snap pics and save them to a file on your drive, trust that these receipts will come in handy during tax season. Learn more about paying from your HSA and reimbursing yourself later.

Telehealth coverage:

If your HSA-compatible high deductible health plan (HDHP) began prior to January 1, 2022, then telehealth expenses may be covered at no cost to you prior to your deductible being met, without disqualifying the plan from being HSA-compatible. This was enacted by the IRS in response to the COVID-19 pandemic. This has been extended with the passage of the 2023 Consolidated Appropriations Act (CAA23) so that telehealth can continue to be covered pre-deductible for plans after December 31, 2022 and before January 1, 2025.

It is important to note that regardless of whether or not telehealth can be covered before reaching your deductible, it remains an HSA eligible expense for account holders, meaning you can use your HSA funds to pay for your share of telehealth visits.

Know who Is covered

As outlined in the IRS Publication 969, eligible individuals that are covered under an HSA include:

  • You
  • Your spouse
  • You, or your spouse if filed jointly, could be claimed as a dependent on someone else's tax return in previous year
  • Any HSA dependents you claim on your tax return
  • Anyone you could've claimed as a dependent, but weren't able to, because they filed a joint return, or earned more than $4,700 in 2023.

Estimating your HSA contribution

It's never easy to predict exactly how much you'll need for health-related expenses. But an educated estimate is a good place to start. See how much you spent in the current year, and go from there. Your personal medical expenses covered by an HSA can include any of the following:

  • Prescription medication
  • Over-the-counter medications and supplies
  • Menstrual care products
  • Anticipated co-pays
  • Your annual deductible

Want to know how much you'll save in taxes now and into the future with an HSA? Use our HSA Calculator to find out.

Create a Health Savings Account (HSA)

Now for the fun stuff. How much you decide to stash away each month is a key part of your HSA spending and saving strategy. But the more you tuck away, the more you can use toward medical expenses. Some of your medical expenses, such as your deductibles, copays and eligible expenses, can come out of this account.

And let's not forget the triple tax benefits of an HSA: Money you put into your HSA account can bump down your taxable income, and withdrawals made for qualified medical expenses are tax-free. And should you decide to invest the funds in your HSA, any earnings are also tax-free.

Commit to auto-contributing a set amount each month or week. For 2024, the changes to HSA accounts include the contribution limit increasing to $4,150 for individuals, and $8,300 for families. If you're age 55 and up, you're eligible for a HSA catchup contribution of $1,000. If you can swing it, contribute regularly into your HSA account so you hit the max.

Review your health insurance premiums

The close of a plan year is always an opportunity to review your plan and make sure it's still a good fit for you. Unless you qualify for a special enrollment period, this is the only time you can make changes to HSA accounts. Here are a few questions to ask yourself:

Have you experienced a major life event? For instance, had a family, got married, got divorced, lost your job, or is one of your kids no longer a dependent and is leaving the nest? (Note, you might also qualify for a special enrollment.) If so, how might that impact your health insurance needs and costs?

Have you moved to a different state? Which insurance carriers and plans are available?

Do you anticipate requiring more medical treatment, prescription medication, and trips to the doctor?

Has there been a significant change in your financial situation?

If you were on an HDHP last year, would it be best for you to continue to stay on a HDHP in the current year? And vice versa?

Getting the ball rolling on your HSA spending and strategy for the year ahead and beyond will position you for success. Less hassle, less worry, and ultimately less work. Godspeed!

As always, the information provided in this article should not be considered legal or tax advice. Please consult a licensed professional for appropriate advice given your individual situation.


Thank you for visiting the HSA Store Learning Center. Don’t forget to follow us for more helpful tips on Facebook, Instagram, and Twitter.

Best Sellers

More From the Learning Center