The best-kept HSA secret Skip to content

The best-kept HSA secret

One of the greatest advantages of a health savings account (HSA) may also be one of the least well-known. The triple-tax advantages of HSAs, as well as the fact that HSA balances roll over each year are great, but did you know that there is no expiration date to reimburse yourself for qualified medical expenses? This means you can "save now, and cash in later."


"Save now, cash in later" just means that you can earn tax-free interest on your HSA contributions by paying for qualified medical expenses out-of-pocket and reimbursing yourself later. As long as you keep receipts and proof that you paid the medical expenses out-of-pocket, you can reimburse yourself from your HSA even years after paying the expense.


Here's how it works (an example):


Step 1: Make a goal

Most people have something they are saving up for, whether that's a vacation, gifts or even retirement. For example, let's say that Jane wants to save money so she can take her family on a dream vacation in three years.


Step 2: Pay qualified medical expenses out-of-pocket

While paying for qualified medical expenses out-of-pocket might at first seem counterproductive to Jane's goal to save money, what she is actually doing is keeping funds in her HSA to earn tax-free1 interest and also potentially growing her HSA funds through investing.2

It is essential that Jane (and anyone else who wants to take advantage of "save now, cash in later") keep her receipts so, when the time comes, she can prove that she paid for the qualified medical expenses out-of-pocket. HealthEquity makes it easy for accountholders to upload their receipts and documentation in the member portal or via the mobile app for safekeeping.


Step 3: Get reimbursed later on

Three years from the time Jane made her goal, she is ready to cash in and use her HSA funds to reimburse herself for the qualified, out-of-pocket, medical expenses. In this example, Jane is a HealthEquity member, so she can use either the HealthEquity member portal or the mobile app to submit a reimbursement request for her accumulated expenses. She will then receive a tax-free reimbursement for the total amount of qualified out-of-pocket medical expenses she previously paid.



"Save now, cash in later" is a great way for accountholders to save for a financial goal, whether that goal is for a vacation or retirement, because there is no expiration date on reimbursement. Accountholders only need to keep proof they paid for qualified medical expenses out of pocket.

To learn more about how to take advantage of the many other benefits that HSAs provide, visit


1HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax-free with very few exceptions. Please consult a tax advisor regarding your state's specific rules.

2Investing is not suitable for everyone. Investments are subject to risk and their value will fluctuate based on market conditions making it possible to lose the principal invested. Investing is not FDIC insured or guaranteed by HealthEquity. Before making any investments, review the fund's prospectus.

Nothing in this communication is intended as legal, tax, financial, or medical advice. Always consult a professional when making life-changing decisions.

The example provided is hypothetical. Results will vary and may not be representative of the experiences of others.

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