Estimate This Year's Expenses

The next step is to estimate your expenses for the year. Make a list of any major procedures and surgeries you have planned. This should include any dental or vision work, like getting a crown replaced or having cataract surgery. If you delayed any significant procedures from 2024, make sure to include those as well.

To find out exactly how much a procedure will cost, call the doctor's billing office and ask them for the billing code. Next, call the insurance provider and give them that code. They can plug it in and determine how much your plan will cover. It's not enough to know what type of procedure you're having done. The exact billing code is necessary to give you the most accurate estimate.

Once you've written down all expected major procedures, make a list of any other services, imaging or lab work you'll need. While some of these may be covered by your insurance, many will still include a copay or coinsurance charge.

Don't forget to add up incidental expenses, like a new pair of glasses or a year's supply of contacts. Go through your medicine cabinet and see if you need to replace any over-the-counter medications. Now that menstrual products are HSA eligible, you can use your HSA card to purchase tampons, pads, period panties and more.

What if I Save Too Much?

If you end up saving more than you need, don't worry. Funds in an HSA will roll over from year to year, even if you don't choose an HSA-eligible health insurance plan the following year.

You can also decide to reduce your contributions at any point. If you're contributing through a workplace plan, ask your HR department how to change your contributions. If your contributions come out of your paycheck, it may take one or two pay cycles for the updates to go through.

If your employer doesn't contribute to your HSA, changing your contributions is even easier. Simply log on to your online account and click on the contributions tab, or check directly with your HSA provider. From there you should see how to adjust or cancel your contributions.

If you can afford to keep contributing, the money in your HSA can actually be invested. Some providers require that you have at least $1,000 in your HSA before that money can be invested, but others have no minimum.

Remember, you're not stuck with a particular HSA provider. If you want to switch to a company with lower investing requirements, you can do that at any time. If you have an employer-sponsored HSA, you can still open up your own account and transfer the money between the two accounts.

You can invest HSA money in mutual funds, ETFs or individual stocks just like you would with a 401(k) or IRA. Any investment earnings will grow tax-free. If you use those earnings to pay for qualified medical expenses, you can also avoid paying taxes on them.

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