Compound It! How much do you want to spend on your HSA?

Health savings accounts are great because you can spend tax-free funds on qualified medical expenses. But just because you have money that can be spent, doesn't mean you should. As in, you want to think long and hard before you spend your HSA funds.

For one, some of us can pay our healthcare-related expenses without digging into your account balance. Yeah, you could, but you can also accumulate a bit of interest in your HSA. You can also use this money to invest in different types of assets such as mutual funds and stocks.

The idea is simple - boost your HSA funds so that when it comes time to retire, you can use the money for health care needs, which is when costs could go up. But, what's the best choice for you?

(As always, remember we're not tax advisors and this article isn't meant to be professional financial advice. Please speak with a qualified financial professional before making these decisions.)

The devil's in the (personal finance) details

Before you get started, it's probably a good idea to look over your financial situation. You'll want to see what it is you're spending your money on and how healthcare fits into the whole picture.

Another important aspect to look at is whether or not you have emergency savings, such as money in a buffer account. Arguably, having an emergency fund is more important than an HSA because you'll want immediate access to cash to use for any purpose.

Next, take a look at your spending habits to see what areas of your budget you can cut back. Think about it - if a prescription costs you $100 and you can easily cover it, then use your everyday funds to pay for it. Then you can leave your HSA alone so it can accumulate interest.

But, if the qualified medical cost will set you back more than a few hundred dollars and dipping into your HSA means you don't need to take out a medical loan, then by all means do it. Sure, there are personal loans or credit cards available, but these options aren't generally worth it.

Using it as an unemployment safety net

If you didn't know already, you can use your HSA funds to pay for health insurance premiums in the event you're unemployed. While we're certainly not suggesting you hoard our HSA funds in case you lose your job, it's not a bad idea to keep that in the back of your mind.

If you've been diligently setting aside money in your HSA funds, you may want to set a limit as to the lowest your HSA can go. For example, if your health premium will set you back $400 a month and you want to make sure you have three months' worth of premiums covered in case you're unemployed, then you don't want it to go lower than $1,200.

This could be a good way to gauge whether or not you want to pay for a qualified expense out of pocket or to use your HSA account.

Never sacrifice your health

It's fine to create self-imposed rules for your money - it's yours after all. However, never sacrifice your health to save a few bucks. If it's the difference between saving a few hundred dollars and purchasing a much-needed item that'll benefit your health for years to come.

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Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.


Compound It! When an HDHP isn't right for a family

Moving is always tough. But, now that my family has finally settled into our new home, my husband and I were able to sit down and review our healthcare options. Since he started a new job (which technically counts as a qualifying life event), we wanted to see if changing my health insurance plan made the most sense.

We knew that this transition was going to be a challenge since we weren't sure how much my husband's new plan was going to cost and if it made sense for me to find healthcare options as a self-employed individual.

Initially, my husband and I thought it best that we find some way to get a high-deductible health plan (HDHP) so we can open an HSA. As we quickly found out, that wasn't the best option for our family.

When a HDHP doesn't make sense

I initially thought that an HDHP made the most sense because none of us have any chronic health conditions nor do we see the doctor that often. Aside from regular checkups and preventive screenings, we've never had to see a doctor except for the occasional cold and fever. Plus, our favorite doctor was still in-network with my husband's insurance plan.

Looking through what our options were, we quickly found out that not all HDHPs offered HSAs. The one that did was a few thousands dollar more per year than the lowest plan. If we had gone with that option, it would have been difficult for us to set aside money for an HSA and pay for health insurance.

If we were only thinking about having an HSA, then our initial plan wouldn't have worked at all. Our intention was to save on healthcare costs, not to add to it. However, once we kept digging into what we could do in terms of our healthcare options, something surprising popped up.

FSAs are a great option

On my husband's plan, we were able to enroll in either a FSA and a HSA depending on the account we chose. Instead of being fixated on opening a HSA account, we saw what other ways we could save on our overall expenses.

As we tallied our biggest expenses, we noticed we could open a dependent care FSA. This is a type of FSA that you can use to pay for eligible dependent care services. These can include preschool, summer camp, before/after school programs and even daycare facilities.

Considering child care is one of our major expenses, we jumped on the opportunity to open this account. Since we could easily predict how much childcare costs - my son's preschool and drop off daycare costs are the same each month - this was a no-brainer decision for us.

Look at all your options

No matter what your situation is, it doesn't hurt to look at all your options to see where you can save money, even if it's not healthcare costs. You can take what I did and list out your major expenses and see if there are any ways a HSA or FSA can help you reduce those costs.

Family must-haves


Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.


Compound It! How an HSA can teach young adults about personal finance

Learning about personal finance isn't the most exciting topic, but it's crucial that parents help set their children off on the right foot. How else will they learn to be responsible with their money and become independent adults?

Sure, you can geek out on spreadsheets and budgeting software any day of the week, but the point is to engage your child not bore them to tears. In order to make money lessons relevant to a young adult, you need to talk financial freedom principles in a real-world context.

Enter the HSA. While it might not be the most obvious way to teach your kid about financial freedom, using and managing an HSA can show them what it really means to be responsible with their money.

Lowering taxable income = awesome

Whenever you make a contribution towards your HSA, let your child know that there are tax benefits to it. Yes, you're saving toward future health care expenses, but making these pre-tax contributions helps to lower your taxable income.

This is a great opportunity to teach your child that the lower your taxable income, the less you could be paying in taxes. And one of the pillars to financial freedom is to keep as much of your hard earned cash as possible. Besides, who really like to pay more taxes?

Cash (flow) is queen

Maintaining accurate HSA records is important. It's a good lesson to teach your kid. Showing your child what it takes to maintain accurate records - things like keeping copies of receipts and entering transactions on a spreadsheet - will teach them to be good stewards with their money.

Knowing the comings and goings with your money will help ensure that your child will do the same with other accounts too. This skill will come in handy when they're budgeting and not needing to reply on things like credit cards to pay their bills.

Saving for a rainy day is a nice perk

Just having an HSA shows that you've prioritized for what truly matters - your physical and financial health. Because let's face it, if you're not entirely healthy, nothing is more important than getting there. Whenever you do your budgeting, take some time to talk with your child about why health is important and what an HSA really stands for.

Because an HSA is technically used for qualified medical expenses, it means that you need to be careful as to what you use your account for. Whenever you make purchases, talk about why you're making a purchase and try to see if they can apply the same decision making process to other areas, such as textbooks or even groceries.

Even if you don't use the HSA for health-related expenses - you can use it like a traditional IRA once you reach 65 - you're still prioritizing your money for retirement. We all know that delayed gratification is paramount to financial freedom, and even though that may be light years away for your child, it's never too early to start learning.

Living on your own? Start here...


Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.


Compound It! Are you being too protective of your HSA?

As most of us know (especially from reading this page), a health savings account (HSA) provides a variety of benefits - tax-free spending on qualified medical expenses, reducing your taxable income, and even giving you another way to invest your cash.

It's not that these benefits aren't great. In fact, they're more than great. But, it's how some use (or don't use) their HSAs that may be the culprit. In other words, some people may be too protective of their HSA accounts.

Why you might be too protective

Before going into the details of why you may be too protective of an HSA, let's talk about how you can qualify for one. It'll help you see how insurance deductibles may affect how you act around money, especially with health care.

Considering that the 2019 HSA contribution limit for an individual is $3,500 ($7,000 for a family), and assuming you max out your contribution limits - you can pay the entire deductible and keep some of it for a rainy day. Even if you wanted to keep that for retirement savings, you can do that too!

In theory, all of the above is great. In reality, it's not entirely how it was designed to work.

According to data from eHealthInsurance, the average annual insurance deductible was $4,328 for individuals and $8,352 for families. What this means is that people are generally paying more for healthcare out of their own pockets. And if you need to dip into your HSA for these qualified medical expenses, you may not really be saving much compared to a plan that has a higher premium.

In fact, the Kaiser Family Foundation Data is showing that deductibles are increasing almost 10 times faster than inflation, and almost six times faster than salaries. Given all these facts, let's talk about why knowing these numbers can hurt your health.

A savings-only mindset may be hurting your health

While it's great that you have a HSA, it's designed to cover health care costs (hence the name). If you don't have any major health concerns or need to see the doctor often, it's really not that big of a deal. However, research from Kaiser Family Foundation found that most people with HDHPs actually put off care they need to preserve more money for retirement. As you know, this can have serious consequences.

Think about it: if you're so intent on saving money, how willingly are you going to part with your HSA funds? The intent with the HSAs and HDHPs was to give more power to the consumer to control healthcare costs. Unfortunately, once we get into the saving mindset, it's hard for us to even consider wanting to pay because we're the ones who need to provide the funds.

Studies dating as far back as the 1970s by the RAND Health Institute reveal that people cut back on their health care-related spending as much as 15% when they know they need to spend their own money.

It's not uninformed consumers that are guilty. Ashish Jha, a Harvard health policy researcher and physician went on a bit of an experiment when he switched to a high-deductible plan. During this time he experienced a racing heart he couldn't slow down. He knew it might lead to a heart attack but he decided to stay home instead of risking a high medical bill.

Bottom line: if you have an HSA or a HDHP to save costs on medical care, think carefully about your actions. It's great to have these tax-free ways to save for retirement. But being too protective of your HSA and cutting back on common-sense health care management can be counterproductive to all of your long-term planning.

Be prepared (and save along the way)


Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.


Future Healthy: A story of insurance, parenting and self-employment

As my family prepares to move to a new location, I'm thinking about healthcare costs. Since I'm making a permanent move to a new ZIP code, this counts as a qualifying life event - I can change my health insurance plan if I want to. However, as someone who's been self-employed for a few years now, health care costs are always on the forefront of my mind.

Luckily, I've been able to latch onto my husband's health plan for the last two years, so I didn't have to navigate the complicated world of health insurance. As we prepare to move though, I can't help but wonder if it's a better idea to branch out on my own.

Searching for an HDHP

One of the ways I thought I could save on money is to look for a high-deductible health plan (HDHP). Not only would I be saving on premiums, but it may also help me to qualify for a HSA. I've considered getting one as it'll help with saving on recurring health-related expenses. I've also thought about using it as an emergency fund of sorts and another way to lower my income tax bracket.

Truth be told, I'm getting confused looking at health insurance plans because not all HDHPs are HSA-eligible. Typically, as long as there's no insurance coverage until you meet the deductible and/or the deductible is higher than a typical health insurance plan, you're good.

Unfortunately, with my variable income, it's hard to predict if I can meet those out-of-pocket expenses with contributions to an HSA.

Taking my son into consideration

Another thing I'm worried about is my 3-year old son. One of the many conversations I'm having with my husband is whether to keep our son on his plan, or get my own insurance to cover him.

Right now, my husband is transitioning to a new job, which adds to the uncertainty of the whole situation. If his employer helps to cover some of my son's premiums, then it absolutely makes sense to stay on my husband's plan. However, we're looking at potentially higher costs if we switch.

Frankly, I'm fine with switching over if it's less, but not at the cost of my son's health. As parents of young children surely know, kids at this age are naturally curious. I'd love to have an HSA as a backup in case we need the money for unexpected health care expenses, but I'm not willing to get a lesser insurance plan just to do so.

Comparing my husband's offering first

I'd love to say that I've already made my choice and it was easy. Right now, we're not sure what we want to do. Sticking with my husband's plan could work if he can choose a HSA-eligible HDHP. Even better if his employer contributes to this HSA. However, if I can find an insurance plan that's cheaper for me as a self-employed individual, then of course I want to save as much as I can.

This is just my story, and it'll be a few more weeks until we're able to see what my husband's employer offers. Until then, I'm going to focus on packing my belongings and hoping for a smooth transition for my family. But at least we'll be ready to decide, by researching all of our options, and choosing the plan that best fits our growing family's needs.

If you're self-employed and wondering what to do when it comes to health insurance, don't fret. If your spouse or partner has some decent options, stick with that first. Unless you're single, it's mostly likely your best bet.

Otherwise, you can shop around at the Freelancers Union, The National Association for the Self-Employed or with The National Association of Health Underwriters to find a local agent who understands your needs and can help you find an affordable option.

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Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.


Wage Up! Using your HSA to feel like you just got back from vacation

Summer's still going strong, and like us, you're probably still enjoying the outdoors and even planning a vacation. But, while the costs of vacation travel aren't eligible for reimbursement from your HSA funds, it doesn't mean you can't use your HSA funds tax-free on qualified expenses to help improve your time off. Sure, it's no replacement for lying on the beach, you can at least feel relaxed and rejuvenated after choosing any one of the following options below.


Before we go any further, you can't just go and get a massage, and count it as a qualified medical expense. It needs to be used specifically to treat an actual medical condition or injury. This includes anxiety, depression, hypertension, diabetes, chronic fatigue and fibromyalgia.

Specific requirements differ with each HSA, but generally, you'll need your doctor to give you a Letter of Medical Necessity (LMN). This letter should state the actual diagnosis and how massage therapy will help to treat the issue. The doctor also needs to mention how long the treatment should be.

Acupressure and acupuncture

Acupuncture is an ancient Chinese medical technique that uses needles to help balance energy flow to treat medical conditions, most commonly pain. The needles don't typically hurt and may even help relieve muscle tension, similar to getting a massage.

Acupressure is similar to acupuncture except there are no needles involved.The practitioner will press on certain pressure points (also known as acupoints) on specific areas of the body. It's meant to help restore balance to the body.

Getting acupuncture or acupressure may count as a HSA-qualified medical expenses, and in some cases, will require an LMN. It also needs to outline how acupuncture or acupressure will be used and for how long, just like for massage therapy.

Alternative treatments

Alternative treatments aren't clinical trials for medicine or procedures. Rather these treatments don't fall into mainstream medicine. When used on a regular basis, alternative treatments can help your body and mind relax as if you did go on a week-long vacation. (Please note: These alternative treatments will likely require a LMN in order for them to count as qualified medical expenses with your HSA.)

Common alternative treatments include:

  • Reiki - This is where an alternative healer accesses your body's natural energy by placing his or her hands lightly over your body. Their hands move around, circulating energy and is meant to aid in relieving anxiety, manage pain and promote relaxation.
  • Naturopathy - Healers use various treatments such as herbal remedies, acupuncture and other kinds of noninvasive treatments to help the body heal itself.
  • Chiropractic - This is where a chiropractor puts your body back in alignment by manipulating the spine. It's meant to help treat a wide variety of conditions, such as headaches and chronic pain.
  • Energy Therapy - Similar to reiki, except practitioners use magnets to manipulate your body's energy fields.

The point of going on vacation is to unwind and escape from real life just for a little bit. Even if you can't use your HSA, you can at least try these three options to relax and rejuvenate your senses.

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Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.


Future Healthy: Quick retirement tips for Gen Z

While millennials have gotten more of the attention when it comes to their financial situation, Generation Z are now starting to reach their college years. Born after 1995, Gen Z is the first generation to grow up with so much technology around them — and they're more aware of their finances and the benefits of financial literacy.

Research and analysis firm Raddon surveyed more than 2,500 teens and found that two-thirds of the group already have a bank account and are three times more likely to have taken a financial class compared to the millennial generation.

Just because this generation is more financially aware, it doesn't mean they don't face some stress like paying for college, getting a job and budgeting for the real world. Although it's far away for most of them, understanding how to save for retirement should also be on top of Gen Z's list.

Looking towards their financial future doesn't need to be scary. If you're part of Gen Z (or a parent of a Gen Z child), here's what you can do to help prepare.

Good vs. bad debt

Maybe Gen Z has witnessed millennials talk to no end about their student loan debt and are a bit worried about taking out any loans. Although debt can be bad, loans do serve their purpose in their financial lives — namely building credit, getting funds to go to college or a large purchase like a home.

Instead of telling them debt is bad, show them what it means to manage loans properly. It could mean learning to use credit cards wisely, what it means to make more than the minimum payments and how doing so builds their credit score. It might also be helpful to talk about why it's more important to get rid of high interest debt first — e.g. increase their net worth and free up money for savings.

Take advantage of employer benefits

Getting a new job can be more exciting that just getting paid. It's all about the benefits. Suggest that your child looks through the employee handbook to see what's covered, especially any employer-sponsored retirement plans like the 401(k). In most cases, an employer will match an employee's contributions up to a certain percent of their paycheck. Yes, we're talking about free money.

Even if your child can't afford to contribute the full amount, he or she can start small — even 1% — and work on increasing that amount. Investing small amounts when you're young is fine because you've got time on your side. Let compound interest do its thing.

Beef up your HSA

Some employers offer what's called a high deductible health plan that qualifies for an HSA. Even if your child is young and healthy, this is a great account to save on taxes, healthcare expenses and even retirement.

That's right, depending on your HSA provider, these accounts let you invest money from your HSA account once it reaches a certain threshold. The money can sit there until you need to use it for qualified medical expenses. Some even let it sit there as long as possible until 65, when you can withdraw this money penalty-free (it will only be subject to income taxes at that point).

Retirement can be a scary subject, especially for the young. However, the more they're aware of what it takes to save and stay the course will reap financial benefits for years to come.


Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.


Compound It! Use your HSA as an unemployment safety net

If you lost your job today, how would you get by? It's not a fun topic to think about, but it's important to have a backup plan when you do find yourself in a bad situation. For most, jobs are the primary source of income, if not the only one. The last thing you want to be thinking of is how you'll cover your bills as you're on a job hunt.

But there are ways to offset this blow. If you've been contributing to an HSA, it can act as an unemployment safety net during temporarily lean times.

Pay for health insurance

One of the perks to having an HSA is that you can use these funds to pay for health insurance premiums while unemployed. Yes, that's right -- your health insurance premium counts as a qualified medical expense when you're out of work. You don't need to worry about digging into your savings, as you can just use your HSA funds until you find another job.

In order to qualify, you need to be receiving federal or state unemployment benefits. That, or you're electing to pay for COBRA or similar continuation coverage.

Use it as an emergency fund

It's your money, why not use it? The HSA is meant to help you with qualified medical expenses, so fully take advantage of it, especially when cash is tight. Use it as an emergency fund of sorts, taking money out tax-free.

If course, you can't use your HSA for just any expense. In fact, using HSA funds for non-medical expenses will result in a 25% tax penalty on the amount withdrawn. But you can use it to reimburse yourself for previous qualified medical expenses (QMEs) you've paid for out of pocket.

It's simple: Whenever you pay for a medical expense with your own money, you can reimburse yourself anytime in the future using your HSA. All you need to do is transfer money from your HSA into a checking account with the exact amount of your QME.

The cool thing is that you're allowing your HSA to compound and grow tax-free while also building up an emergency fund for possible rough patches. The funds you accumulate can be carried forward for as long as you like. For example, if you have $500 in QME in a given year, you can rest assured knowing that you can take out $500 if you find that you're out of a job and need it to pay some bills.

Listen, nobody likes to think a stressful situation such as a job loss but it's necessary. Dealing with such a blow to your finances will help if you're prepared. If you already have an HSA, rest assured that the money is there for you when you need it.

If you don't have one, it's always a good idea to find out if you're eligible and take a few minutes to open on up. Like they say, a ounce of prevention is worth a pound of cure.

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Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.

Photo by bruce mars on Unsplash

Tax Facts: Self-employment and HSAs

Working for yourself has incredible benefits, one of which is the ability to make your own schedule. However, with freedom, comes responsibility.

Healthcare costs are no joke. Paying for your own medical costs can get expensive fast. Luckily, health savings accounts (HSAs) are here to help. Contributing to an HSA can help you offset taxes along with other advantages like tax deferred savings and tax free withdrawals on qualified medical expenses.

And, contributing to an HSA for self-employed folks is pretty similar to those who hold down a 9 to 5.

Do you have a high deductible health plan (HDHP)?

Choosing a healthcare provider is a little bit more of a hassle now that you're self-employed. Luckily, there are places like to help you enroll in a plan. When you do, you'll want to find out first if your insurance plan is HSA-eligible, whether you plan on opening a new HSA or using one from your previous employer.

In order to qualify to participate in an HSA, you'll need to meet the following criteria:

  • You don't have other medical coverage like Medicaid, Medicare or even FSA coverage through your spouse's' plan
  • You're enrolled in an HSA-qualified high deductible health insurance plan

Contributing to an HSA as a sole proprietor

Since you file taxes on your personal tax return, you're essentially treated like someone making HSA contributions on their own. And so you're able to deduct some of your contributions on your personal income tax return.

The good news is, as long as you made a profit during the tax year, you can file the deduction. The maximum is $3,450 (for those participating in the HDHP as single and $6,900 for those participating in the HDHP as family) or an extra $1,000 if you're 55 and older. The caveat is that you can't put more in your HSA than your net self-employment income.

Some traditional employees can contribute to their HSA on a pre-tax basis, provided their employer's plan allows for this and they are eligible to participate. However, if you're self-employed, you don't have that same luxury. You would contribute after-tax dollars to your HSA and then do a line item deduction in your Schedule C. To make sure you're getting everything right, it's best to consult a tax professional on these matters.

If you have an LLC...

As a single member LLC, you're not going to treat your HSA much differently than a sole proprietor. Though, if you have employees, you may be able to implement a plan that can allow them to make pre-tax contributions. This is what's known as a "cafeteria" or "125" plan.

The downside is that you as the owner can't participate. You can only contribute after tax dollars and it's counted towards your personal taxes. As in, you or your partner(s) can still take a deduction on a personal tax return. That means whatever you contribute towards your HSA will reduce your adjusted gross income. Just like a sole proprietor, you can only claim this deduction if you actually made a profit.

Keeping (or opening) an HSA is extremely beneficial for everyone, especially self-employed folks. Since contributing to one isn't that much different than what you've been doing, how hard can it be? As long as you're diligent about your paperwork, you can easily save on qualified medical expenses.


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Tax Facts is a weekly column offering straight up, no-nonsense HSA tax tips, written in everyday language. Look for it every Tuesday, exclusively on the Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook and Twitter.


Tax Facts: Can I use HSA funds abroad?

Hiking the Andes or lounging on a private Caribbean island sounds like a dream - until you sprain an ankle, or get stung by a jellyfish.

We're not trying to be downers. But, whether you're traveling for a week or a month, the last thing you want to think about is taking care of medical mishaps. In the event that you do, you might as well try to save on taxes, right?

So rest assured, you can use your HSA when traveling abroad. However, there are limitations as to what you can spend your money on tax-free. And keep in mind you may also need to pay extra fees, depending on your HSA provider.

What counts as a qualified medical expense overseas?

According to the IRS, you can purchase medications purchased in another country only if you consume them there. The medicine needs to be legal in the United States and in the country you're purchasing it from.

As for what types of drugs and medicine counts, they're technically the same ones that qualify when you're in the U.S. It must be used for medical care (general health and cosmetic purposes don't count), and needs to be legally purchased and prescribed.

You may also use your HSA funds for medical treatments, as long as they're considered legal in the country where you had the procedure done.

A few examples?

Let's say you end up getting a fever for a few days and end up going to a doctor in Canada. He decides to prescribe you antibiotics to knock it out of your system. As long as that type of antibiotics is considered legal (and can prove it was actually prescribed), it'll most likely count as a qualified medical expense if you take the antibiotics while in Canada.

Now if you were to purchase vitamins or sunscreen, these may not count. Even if it's the exact same brand you use in the U.S. it'll be hard to deduct this expense, as you could be using the sunscreen or vitamins long after your trip is over.

Should you use your HSA funds abroad?

Every little bit of savings helps, and on the surface it sounds like it makes sense to use your HSA funds when you're in another country. However, it may cost you more to do so versus paying out of pocket.

Some HSA providers provide a debit or Visa card for you to access your funds. However, if you use the card in another country, you could be charged a markup, or a conversion fee. These fees are similar to what you'd pay for any other credit card and can range anywhere from 1-3% depending on provider.

Of course, only you can decide what's the best decision for you. For example, if you paid for a pricey medical procedure that you can't pay off all in one go, using your HSA may be a smart choice. The best course of action is to bring a few medications just in case minor mishaps happen, and use common sense when traveling. That way, you can enjoy your trip and not spend most of it in the emergency room.

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Tax Facts is a weekly column offering straight up, no-nonsense HSA tax tips, written in everyday language. Look for it every Tuesday, exclusively on the Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook and Twitter.


Wage Up! 3 lesser-known eye care expenses covered by your HSA

We've mentioned LASIK surgery on this page before -- and definitely recommend looking into it. But getting vision correcting surgery isn't the only way to take advantage of HSA funds. And we're not just talking about reading glasses or eye drops, either.

For those with eye care concerns - even if they're less serious - using funds from your account can save you some much needed cash. Some of these less-common expenses may even be eligible without a prescription.

Read on to find out about these lesser-known HSA-eligible procedures to take care of your eyes, and your wallet.

Cataract surgery

Cataracts are opaque or cloudy areas of your lens. When you have them, things you see tend to look blurry, hazy or even faded in color. Other symptoms include being sensitive to light, trouble seeing at night, or even seeing double.

Age is the most common reason for developing cataracts -- but that might be sooner than you think. The eye's normal proteins start to break down around 40, and vision problems may not happen until you're 60 or older. Your chances of getting cataracts may be higher if there has been a family history or if you have certain medical conditions, such as diabetes.

It's probably a good idea to consider getting the procedure done when you're finding it difficult to do everyday activities. Yes, the thought of getting eye surgery may give you the shivers, but it's a simple outpatient procedure that can be done within an hour. Your ophthalmologist will know if cataract surgery is right for you.

More serious eye surgeries

While LASIK surgery to correct your vision does count as an eligible medical expense, other more serious eye diseases and conditions also qualify. These can include glaucoma, pterygium (a non-cancerous growth over the eye) and optic nerve conditions.

The most common way to do eye surgery is using lasers. However that may be up to your doctor to decide. Some surgeries - such as treatments for glaucoma - involve draining liquid to lower and relieve eye pressure. Others include penetrating keratoplasty, which is a procedure involve replacing the entire cornea.

Instead of surgery, your ophthalmologist may recommend eye medication instead. These could include eye drops to relieve symptoms of glaucoma or Lucentis, an eye injection administered by a doctor to help restore vision.

Eye pressure monitors

These devices are for those who need to measure the intraocular pressure (IOC) of the fluid in the inside of your eyes. This is absolutely essential to help detect and monitor glaucoma. In other words, this piece of equipment is necessary if you're a glaucoma patient and need to monitor your condition.

Since consistently monitoring your eye pressure is essential to help you see how effective your treatment is, it's actually more cost-effective to purchase this machine. That's because you don't need to visit the doctor to monitor your eye pressure, which can be both costly and inconvenient.

Bottom line

Hopefully you don't need to worry about any of the above procedures and equipment. But if you do, know that you can use your HSA to help pay for these qualified medical expenses. As always, maintaining optimal health is important, so make sure you go for an eye exam every 1-2 years. And just as a friendly reminder, regular eye exams are covered with your HSA!

Shop eye care

Systane Complete Lubricant Eye Drops

This soothing eye drop forms a matrix of protection across the entire eye surface.

Visine Original Redness Reliever Eye Drops

For redness relief in moments, try Visine Original Redness Reliever.


Wage Up! Warm weather safety with an HSA

Warmer weather means it's time to open the windows, start planning camping trips, biking around the neighborhood and more (do any of you still chase down ice cream trucks?). While we all like to have a great time, injuries and other unfortunate events can happen. That's why it's important to squirrel a bit of money away - or at least be prepared to use your HSA funds - for those "just-in-case" moments.

Allergy testing and products

Everyone seems to think allergies only happen in the spring and fall. But tell that to the people currently battling runny noses and itchy eyes, even when the thermometer looks ready to break. Summer allergies can drum up some unusual symptoms, and if you love the outdoors, it can seem really unfair.

Common allergy culprits during the summer are insect bites, mold and pollen. Getting tested for any possible allergies is helpful in determining what you may need to be cautious of. Even if you've been tested before, it doesn't hurt to get one again after some time. For example, I used to be able to eat eggs, but if I touch them now I'll break out in hives.

Getting tested for allergies counts as a qualified medical expense for both HSAs and most medical FSAs. As for which type of allergy test to get, ask your doctor which one is best. The three most common types are the skin prick test, skin injection test and patch testing. All will involve being exposed to common allergens to see how you react.

Depending on your results, you may need to get an allergy medication regimen or get some shots. Luckily, allergy medications can be covered by your HSA and most FSAs as long as you have a prescription from your doctor. Some of these include antihistamines, corticosteroids, decongestants of bronchodilators (inhalers for asthma sufferers).


Also called aquatic therapy, hydrotherapy uses water to to treat conditions like arthritis, rheumatic conditions and even sports injuries. You do get into a warm pool but it's not like swimming at all.

Instead, you work with a physiotherapist who will guide you through various exercises. As you do so, the water helps to release tight muscles and increases blood circulation, kind of like a massage does.

Of course, it's better if you don't go too crazy in the summer. But injuries and ailments aren't exactly avoidable if you're super active in the summer. As long as you get a letter of medical necessity, hydrotherapy can be a great way to help heal those injuries.

Athletic treatments

Facing minor abrasions and injuries are common if you're going to be active in the summertime. While you may not need anything as extreme as hydrotherapy, there are items you can purchase to help deal with discomfort and pain.

Items that don't need a prescription to be HSA-eligible include ankle braces, arch support insoles, cold packs and even cast covers (on those warmer days, even broken bones won't keep us out of the water on a hot day).

Have fun, be safe

Nobody wants to think about the not so fun parts of summer activities. As always, it helps to be prepared. Start budgeting now for what you could need, just in case. This way, an ice pack or bandage is ready and waiting when it comes time to nurse those wounds.

Stay sun-safe!

Avene Mineral Tinted Sunscreen Fluid

Daily broad spectrum UVA/UVB protection.

Coola Mineral Liplux Lip Balm

Forms a protective barrier on skin.


Whether you're spending steadily or saving for something big, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.


Wage Up! A quick plan for buying health care items

Since you already have an HSA (or seriously considering one), no doubt you're someone who loves to save money. You're already saving money by using tax-free savings to use for qualified medical expenses, but there could be ways to save even more. With some patience and know-how, you can time your purchases so that you're maximizing your hard earned dollars.

Even if you find deals, you can learn how to find coupons and rebates so you practically don't have to pay full price again. Intrigued?

Is there really a best time of the year to buy health care items?

In theory, yes. However, it's not always the case. During the spring and winter months, you'll typically find cold and allergy medicines on sale. Summer is (generally) when you'll find better deals on items like sunscreen and even first-aid kits.

If you want to purchase medical equipment, you may find it harder to predict when these will go on sale, if at all. Typically, electronics are on sale around January and November, so check around those times if you can wait that long.

What can I do if I want to save money?

Just because it may be hard to predict when certain health items will go on sale, doesn't mean you can't save a few bucks here and there. Believe it or not, it's not that hard to find discounted items. Here's what you can do to maximize your chances of getting discounts:

Search for rebates

If you intend on purchasing any sort of equipment, manufacturers sometimes have promotions and offer rebates. In most cases, you can head to their official site to check for any current ones. All you really need to do is make a purchase, mail in a copy of your receipt along with the rebate coupon and you should receive a check for the amount back within the timeframe stated.

If you can't find any rebates, poke around and sign up for newsletters of brands you shop from often. Usually, they'll send out seasonal emails for promotions only subscribers will have access to. For those short on time (who isn't?), there are a ton of websites dedicated to couponing you can check out.

Install money-saving browser extensions

Those who love to shop online can rejoice - there are a ton of free browser extensions that'll help when you make purchases. Apps like Ebates, Honey and Invisible Hand help you search for promo codes and online coupons and applies automatically when you check out. Some even show you other places that offer lower prices, helping you save even more money.

Join loyalty rewards

There's no shortage of stores that offer incentives. Many have rewards cards that give you points every time you make a purchase. These points can go towards discounts on future purchases or cash back options.

For example, large pharmacy and grocery chains offer rewards points. Some stores even offer store credit cards that give you discounts or more points. If you go this route, make sure you use your credit card responsibly before signing up.

And when it comes to using your HSA, we recommend a site where there's no guesswork or concern about eligibility.

Bottom line

Just because health care is supposed to be expensive, doesn't mean it has to be. Keep a running list of items you regularly use and monitor websites and stores to see when they go on sale. It takes a little preparation on your part, but the savings you reap will be so worth it.

Guaranteed HSA-eligible products

Adventure Medical Mountain Weekender First Aid Kit

The perfect balance between affordability and portability.

Nexcare Waterproof Clear Bandage - Assorted

Stay on in water and keep water out.


Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.