I'm getting a bit of a reputation around the KPCC office: More and more, co-workers are seeing me as the health reporter who does a lot of crazy sports and occasionally gets hurt.
In January, I fell and hit my head on a rock while hiking and rock climbing in Joshua Tree National Park. I was treated in the emergency department and urgent care for that injury. About a week ago, I broke a bone in my foot while attempting to do an AcroYoga move. This time, I went to urgent care and saw an orthopedist. On top of that, I regularly visit the chiropractor, and now an acupuncturist, to deal with the aches and pains associated with these high-intensity activities.
I have a health plan with a high deductible that I haven’t yet met. So I’ve paid for all of this medical care using the debit card associated with my health savings account, or HSA.
I’ve realized that I might be using my account wrong.
"Put as much into that HSA as you can"
You must have a high-deductible health plan to contribute to an HSA. As I've mentioned here before, I have a $3,000 deductible, so I'm eligible for one of these accounts.
I thought it would be smart to, over the course of a year, have a total of $3,000 deposited from my paycheck into my account. That way, I figured, I'd be covered financially in case I had a health emergency. The next year, I put in half that amount, since I'd hardly touched the money I'd saved the previous year.
Experts tell me that was my first goof – and it's one that a lot of Americans make.
"If I have one piece of advice for people with an HSA account, it's put as much into that HSA as you can each year, because it can not only cover this year's expenses, but you can also use that money any time over the rest of your life," says Todd Berkley, who runs the website AskMrHSA.com.
People with individual HSA plans can put in up to $3,350 in 2015 and families can save up to $6,650. (HSA limits change each year with inflation.) The deposits are tax-free, growth is tax-free, and withdrawals for medical expenses are tax-free, Berkely explains in this FAQ. The money can then be used for eligible medical expenses for yourself, your spouse and your current tax dependents for the rest of your life, Berkley says.
The experts I spoke with say these accounts are also a great way to save for retirement. I feel too young to weigh in on this, but Lisa Zamosky wrote a great piece on the topic for the Los Angeles Times. Check it out!
No vitamins or vacation
So what's an eligible medical expense?
The Internal Revenue Service says medical care expenses "must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or vacation."
It boils down to this:
- In the 'yes' category are things like abortion, acupuncture, chiropractor, contact lenses, crutches, eyeglasses, hearing aids, prescribed medicines and drugs, pregnancy test kits, sterilization and wheelchairs.
- In the 'no' category are things like cosmetic surgery, dance lessons, hair removal, health club dues, maternity clothing, nutritional supplements and teeth whitening.
A few tips from the experts I spoke with:
- When you pay for medical care or devices using your HSA, be sure to submit claims for these expenses to your insurance carrier. That way, they can count towards your deductible and you will take advantage of any discounts your health plan has negotiated with health providers.
- Keep all of your receipts. They will come in handy if you ever get audited. (This is another mistake I've made!)
Remember how I said that I'm both very active and accident-prone?
The result is that I occasionally need massages. Not relaxing massages, but the kind where I wince and sweat as the therapist works through my injuries. I needed to know: Can I use the debit card associated with my HSA to pay for these sessions?
"Well, it depends," Berkley tells me.
He explains that you can't use the savings account on a massage that was intended to "promote your general health." But if a doctor prescribed the massage for a specific condition during a specific period of time, it could be considered an acceptable expense.
My takeaway: If I have an injury that requires massage, I should get a doctor's note saying the treatment is a medical necessity.
Speaking of medical necessity, I also asked if you could use an HSA to pay for medical marijuana.
Even if you have a doctor's prescription for weed, the answer is no, "because medical marijuana is still illegal at the federal level, so it is impermissible to use an HSA for this," Jody Dietel, chief compliance officer for Wageworks, Inc., says in an e-mail.
And in case you were wondering, Forbes has this explainer on what happens if you use your HSA debit card to pay for take-out.
Do you have questions about how to use your Health Savings Account? Let me know in the comments section below or e-mail me at Impatient@scpr.org.