HSA: How can I spend my Health Savings Account Contributions?

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Health Savings Account funds can be withdrawn tax-free for any qualified medical expense.  At age 65 funds can be withdrawn for any reason, although the amount withdrawn will be subject to income taxes.  If under age 65 and funds are withdrawn for any reason other than use on qualified medical expenses or the items listed below will be subject to standard income tax and a ten percent IRS penalty.

Funds used to pay for the following are tax and penatly free:

• Qualified medical expenses as defined under section 213 of the IRS tax code.
• COBRA insurance premiums.
• Qualified long-term care insurance and expenses.
• Health insurance premiums for individuals receiving unemployment compensation.

Please be sure to check with the IRS for any other qualifed expenses.  You can visit the IRS website at: http://www.irs.gov/