Health savings accounts, or HSAs, were introduced as a way to put consumers in charge of their own health care spending. The reasoning is that consumers make smarter decisions when they spend their own money, and that those smarter decisions will eventually drive down the cost of medical care for everyone. If you have an HSA, you need to understand just what those funds can, and cannot, be used for.
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When you go to the doctor, either for a routine physical or for an accident or illness, you probably pay a copay, with your health insurance plan picking up the rest of the cost. You can use the funds in your HSA to pay the cost of your copay. Just hand your HSA debit card to the office manager at your doctor's office when you get your bill. Keep a copy of your bill, and your HSA receipt, with your tax records.
Even if your health insurance plan includes coverage for prescription drugs, you are probably required to pay at least something toward the cost of your medications. You can use the funds in your HSA to pay for any prescription drug costs not covered by your health care plan. The pharmacist will be able to use your HSA debit card and bill it appropriately. The point-of-sale software systems used in pharmacies are designed to indicate which items are eligible for HSA payments and which are not.
One advantage of an HSA is that it can be used to pay for things that your health care plan does not. Most health care plans do not pay for over-the-counter medications like cold remedies and nonprescription allergy medications, but you can pay for these items with the funds in your HSA. The easiest way to pay for these items is to hand your HSA debit card to the pharmacist. The pharmacy's software will instantly determine which items you can pay for out of your HSA.
Prescription Eyeglasses and Contact Lenses
The funds in your HSA can be used to cover the cost of prescription eyeglasses and contact lenses. If your vision or health care insurance pays part of the costs, only the uncovered amount can be paid out of your HSA funds. The easiest way to use your HSA funds to pay for prescription eyewear is to give your HSA debit card to the person handling the transaction. The worker in the optometrist's office will compute the total cost of the glasses or contacts, then deduct what your insurance pays before billing the remainder to your HSA. Be sure to keep copies of all your receipts with your tax documents.