There are a number of ways to manage your Health Savings Account and disbursements. Decide what your philosophy towards your HSA account will be, (utilization or investment) and stick to that philosophy.
These strategies may have certain benefits and risks that may or may not be advisable given your health history and/or financial situation. Please consult your tax or financial advisor as needed.
- Build HSA balance to a level of exposure that you are comfortable with, and fund on an as-needed basis.
- Make regular monthly contributions to the HSA account, the same way you make premium payments on health insurance.
- If you have not deposited the maximum contribution in a given plan year, use the funding grace period of the first quarter of the following year.
* Keep good records of all qualified-expense withdrawals. Save your receipts!
- Withdraw funds as available and as needed for any qualified expenses.
- Initially, use for only health insurance-covered items. Postpone using your HSA for any non-insurance plan covered services until you see if you are going to meet your deductible. Towards the end of the year, once you have an idea what your need for the deductible will be, you may decide to either obtain additional services or reimburse yourself for non health-insurance covered services.
- Build for retirement. The HSA does not have to be to used to pay for any medical expenses, and can be left untouched as another retirement savings and/or investment account. While this is not the general intent of the HSA, it is an option that may or may not make sense given other tax and investment strategies. This precludes paying for all eligible HSA expenses with pre-tax dollars.