You can withdraw money from your HSA, but the rules depend on what you spend it on

Yes, you can take money out of your HSA. The catch is that withdrawals for non-medical expenses come with a tax penalty and income tax on top of what you withdraw. If you use the money for may have access to medical expenses — things like copays, deductibles, prescriptions, dental work, and vision care — you withdraw tax-free and penalty-free. If you withdraw for anything else, you pay income tax on the amount plus a 20% penalty.

The IRS maintains a list of what counts as a may have access to medical expense. It is longer than most people expect — it includes things like acupuncture, hearing aids, and even some over-the-counter items if a doctor prescribes them. But it does not include gym memberships, cosmetic surgery, or most vitamins.

Key Takeaways

  • Withdrawals for may have access to medical expenses are tax-free and penalty-free, but non-medical withdrawals trigger both income tax and a 20% penalty.
  • may have access to expenses include copays, deductibles, prescriptions, dental work, vision care, and many other medical items the IRS has listed.
  • You can withdraw money by requesting a check from your HSA provider, using a debit card linked to the account, or submitting a reimbursement request.
  • Keep receipts for all medical expenses you pay with HSA funds, because the IRS can ask you to prove the expense was may have access to.
  • After age 65, you can withdraw money for any reason without the 20% penalty, though non-medical withdrawals still owe income tax.

How to request a withdrawal from your HSA

The method depends on your HSA provider. Most HSA accounts come with a debit card that works like a regular bank card — you swipe it at the pharmacy, doctor's office, or medical supply store, and the money comes straight from your HSA. This is the fastest way to pay for a may have access to expense.

If you do not have a debit card or prefer not to use it, you can request a check from your HSA provider. Log into your account online or call the customer service number on your statement. You will tell them the amount you want and provide your mailing address. The check usually arrives within five to ten business days.

A third option is to pay the medical expense yourself and then ask your HSA provider to reimburse you. You submit a form (usually available on the provider's website) along with a receipt or invoice showing the expense was medical. The provider reviews it and sends you a check or deposits the money into your linked bank account.

What counts as a may have access to medical expense

The IRS publishes a list of may have access to medical expenses, and it covers far more than most people know. Obvious ones include doctor visits, hospital stays, surgery, prescriptions, and dental and vision care. But it also includes acupuncture, chiropractic care, hearing aids, crutches, wheelchairs, and even some over-the-counter items if a doctor prescribes them in writing.

Insulin and other diabetes supplies are may have access to. So are fertility treatments, mental health counseling, and physical therapy. If you are unsure whether a specific expense qualifies, your HSA provider can usually tell you, or you can check the IRS Publication 502, which lists may have access to medical expenses in detail.

Things that do not may have access to include gym memberships, cosmetic procedures (unless medically necessary), most vitamins and supplements, toothpaste, and general health products. Health insurance premiums themselves do not may have access to, though some exceptions exist for COBRA continuation coverage and long-term care insurance.

Tax consequences of non-medical withdrawals

If you withdraw money from your HSA for something that is not a may have access to medical expense, you owe two things: income tax on the amount you withdraw, plus a 20% penalty. So if you withdraw $1,000 for a non-medical reason and you are in the 22% tax bracket, you would owe $220 in income tax plus $200 in penalty — a total of $420 on top of the $1,000 you took out.

This penalty applies to the amount withdrawn, not to your entire HSA balance. If your HSA has $5,000 and you withdraw $1,000 for a non-medical reason, the penalty is 20% of that $1,000, not 20% of the $5,000.

You report the non-medical withdrawal on your tax return when you file. Your HSA provider sends you a Form 1099-SA at the end of the year showing all your withdrawals. If you took out money for non-medical reasons, you will need to report that on your return and pay the tax and penalty.

Keeping records and receipts

The IRS does not require you to submit receipts when you withdraw money from your HSA, but you must keep them. If the IRS audits your account, they can ask you to prove that the expenses you paid for were actually may have access to medical expenses. Without receipts, you cannot prove it, and you may have to repay the withdrawal plus penalties and interest.

Keep receipts for at least three to seven years — the IRS can go back that far in an audit. Store them in a safe place, either in a folder at home or scanned and backed up digitally. If you use the HSA debit card, your provider may keep a record of the transaction, but that record usually does not show what you bought, only where you bought it. A receipt from the pharmacy or doctor's office is what proves the expense was medical.

What happens to your HSA after age 65

At age 65, the rules change. You can withdraw money from your HSA for any reason without the 20% penalty. Non-medical withdrawals still owe income tax, but the penalty goes away. This makes an HSA function like a traditional IRA after 65 — you can use it for anything, but you pay income tax on non-medical withdrawals.

Many people use this feature to let their HSA grow tax-free during their working years, then use it for general retirement expenses after 65. You are not required to withdraw anything at any age, so the money can stay in the account and keep growing.

HSA withdrawals and your HSA-may be able to access health plan

You can only have an HSA if you are enrolled in a high-deductible health plan (HDHP). If you leave your HDHP and switch to a different type of health insurance, you can still withdraw money from your HSA for may have access to medical expenses, but you cannot make new contributions. The money already in the account stays there and can be used whenever you need it for may have access to expenses.

If you switch back to an HDHP later, you can start contributing to your HSA again. The account does not close when you change insurance — it just stops accepting new contributions until you are may be able to access again.

Frequently Asked Questions

Can I withdraw money from my HSA to pay for my health insurance premium?

Not usually. Health insurance premiums do not count as may have access to medical expenses. However, there are narrow exceptions: you can use HSA funds to pay for COBRA continuation coverage, Medicare premiums (Part A, B, D, and supplemental), and long-term care insurance premiums. Regular health insurance premiums through your employer or the marketplace do not may have access to.

What if I withdraw money and later find out it was not a may have access to expense?

You owe the 20% penalty and income tax on that withdrawal. You cannot undo it. The best approach is to ask your HSA provider or check the IRS list before you withdraw, especially for expenses you are unsure about. If you have already withdrawn and paid for something that turned out to be non-may have access to, you will report it on your tax return.

Can I withdraw money from my HSA to pay for my spouse's medical expenses?

Yes. Your spouse does not need to be on your health plan or have their own HSA. If your spouse has a may have access to medical expense, you can use your HSA to pay for it, and it counts as a may have access to withdrawal. You will need the receipt showing the expense was medical.

Do I have to withdraw money from my HSA every year?

No. There is no requirement to withdraw anything. Unlike some retirement accounts, HSAs do not have required minimum withdrawals at any age. The money can stay in the account indefinitely and keep growing. You withdraw only when you have a may have access to medical expense or need the money.

Can I withdraw money from my HSA if I am no longer working?

Yes. Your employment status does not affect your ability to use your HSA. Once the money is in the account, it is yours to use for may have access to medical expenses whenever you need it, whether you are working, retired, or between jobs. You just cannot make new contributions if you are not enrolled in an HDHP.