Health Savings Accounts

You can combine health savings account (HSA) with an eligible health insurance plan. This allows you to pay for qualified medical expenses tax-free. Here’s how it works:

  • Plan — Pays for covered expenses once you meet the deductible.
  • HSA — Pays for medical expenses that qualify, and it can be used to cover deductibles.

Why choose an HSA plan?

  • Lower premiums. Health plans with HSAs usually cost less than most copay plans.
  • Funds roll over. If money in the HSA isn’t spent, it adds up and stays in the account from year to year.
  • Tax exemptions. Qualified medical expenses paid by HSAs are not taxed.
  • Tax breaks. HSA deposits are deductible from federal gross income (within legal limits).
  • Save for retirement. Savings in HSA accounts can grow and are tax-deferred.
  • Manage health care expenses. If you have a high-deductible health plan, an HSA may help you save and pay for health care. 

How an HSA works

Here's how you can start an HSA and manage it to get the most out of your account. 

  • Open your account. Your employer might offer an HSA or you may be able to start one on your own. 
  • Make deposits. Your employer might add money too
  • Get tax breaks. Your work might offer pre-tax payroll deductions. If not, your deposits are tax-deductible
  • Pay for health care. Use your HSA to pay for things like deductibles, eyeglasses and medicine
  • Let your money grow. It earns interest tax-free
  • Roll it over. There’s no “use it or lose it” at the end of the year. You keep your money — even if you change jobs or retire. 
  • Retire with more. After age 65, use your money without a penalty. Qualified medical expenses are tax-free. 

What medical expenses qualify?

Qualified medical expenses are defined by the IRS. They are most often services or items that are purchased to help ease or prevent a physical or mental defect or illness.1 Here are some examples:

Medical expenses that qualify Medical expenses that do NOT qualify

Vision care (exams, glasses, Lasik eye surgery)

Health insurance premiums, except when receiving federal or state unemployment benefits

Dental care (cleanings, braces, fillings)

Cosmetic plastic surgery

Prescription drugs

Health club dues

Long-term care expenses, including long-term care insurance premiums

Hair transplant

Health insurance deductibles, copays, coinsurance

Teeth whitening

Mental health care (may be exceptions)


Transportation related to medical care


Note: Withdrawals from your HSA for non-qualified health care costs will be taxed at your income tax rate, and a 20% tax penalty will be added if you’re less than 65 years old.

Refer to the IRS for a complete list of all current qualified expenses.

See the IRS List

Important things to know about HSA plans:

  • Keep a record of all HSA receipts for tax purposes.
  • Qualified medical expenses that happen before you set up your HSA will not be tax-free.
  • You might be able to use your HSA card at ATMs to withdraw cash for qualifying medical expenses.
  • You can deduct the amount you contribute to your HSA each tax year (provided it is less than or equal to the maximum allowable HSA contribution limit).
  • In some cases, a small monthly maintenance fee may be required.
  • In most cases, there is no minimum or maximum contribution for an HSA account. Once you reach a minimum balance of $2,000, you may be able to place savings in select mutual funds. However, it’s good to know that these investments are not FDIC-insured.

Sign up for an HSA today

  1. Check with your employer to find out your options.
  2. If an HSA is not available, explore your options at Optum Bank®, the UnitedHealthcare bank of choice.


  1. Qualified medical expenses may not be covered under your plan.
  2. Adjusted annually in accordance with the Consumer Price Index. All of our high-deductible insurance plans offered with an HSA meet the IRS requirements.


Health savings accounts (HSA) are individual accounts offered by Optum Bank®, member FDIC, and are subject to eligibility and restrictions, including but not limited to restrictions on distributions for qualified medical expenses set forth in section 213(d) of the Internal Revenue Code. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment and restrictions. Federal and state laws and regulations are subject to change. HSA is not insurance. For costs, benefits, exclusions, limitations, eligibility and renewal terms, call a licensed product advisor to discuss your health insurance options at (866) 310-7451 or get a free health insurance quote.