Can I use an HSA to pay financed payments for LASIK?
From HSA Resources -  I understand that I can reimburse myself from my HSA for qualified medical expenses that I pay out-of-pocket but is there a time limit? Do I need to reimburse myself in the same year? You have your entire lifetime to reimburse yourself. As long as you had your HSA established at the time the expense was incurred, you save the receipt and it was not otherwise reimbursed, you can reimburse yourself for the expense from your HSA even years later. The important thing not asked or mentioned above is that the HSA must be in place before the expense occurred. In your case, should the LASIK procedure be before the HSA is established, it's not an eligible expense.
If you have enough medical expenses to empty your HSA tax free, that is certainly an option. However, you have another option. You could roll your HSA funds over to a different HSA that has better investment options. Doing this has a huge advantage over any other taxable account or retirement account: it will grow tax free, and you will be able to withdraw tax free at anytime, as long as you accumulate enough medical expenses to cover your gains.  If you don't have a lot of money in your HSA now, it might not be worth the effort to maintain an HSA and continue to track your medical expenses. But if you have enough in there to invest, moving it to an investable HSA is probably a better option than simply moving it to a taxable account. "Note that even if you are limited to the HSAs your employer provides, you can still set up your own HSA with whatever trustee you want and periodically transfer the funds from your employer sponsored HSA to your own HSA: according to IRS pub 969 ""Contributions to an HSA"" section: Rollovers A rollover contribution is not included in your income, is not   deductible, and does not reduce your contribution limit. Archer MSAs and other HSAs.   You can roll over amounts from Archer   MSAs and other HSAs into an HSA. You do not have to be an eligible   individual to make a rollover contribution from your existing HSA to a   new HSA. Rollover contributions do not need to be in cash. Rollovers   are not subject to the annual contribution limits.   You must roll   over the amount within 60 days after the date of receipt. You can make   only one rollover contribution to an HSA during a 1-year period. Note. If you instruct the trustee of your HSA to transfer funds directly to   the trustee of another HSA, the transfer is not considered a rollover.   There is no limit on the number of these transfers. Do not include the   amount transferred in income, deduct it as a contribution, or include   it as a distribution on Form 8889. (italics mine) There may be minimums, opening, closing costs, etc. or whatever depending on each plan, but that's not limited by the IRS. So if you transfer the money yourself, you can only do it once per year, but there are no limits to when or how many times you can instruct the old HSA trustee to transfer funds directly to the new trustee. I also talked to the IRS today and they confirmed that you can have multiple HSA accounts as long as your total contributions don't exceed the yearly maximum (and from the quote above, transfers don't count as contributions)." You can use it for medical expenses even if you don't have a high deductible policy. It can cover prescriptions, copays, deductibles, co-insurance, dentist, orthodontics... As long as it is being used for an approved medical expense there is no tax or penalty.  Yes it doesn't save you on the monthly service charges but it does allow you to cut your medical expenses for a while. The big difference for me under the High deductible plan has been that instead of paying the co-pay, now I am now responsible for the negotiated rate until I reach the deductible limit. The HSA is only a way to funnel medical payments through a tax free account the insurance company and the doctor don't care about the HSA. If we go out-of-network, then I am responsible for the full rate, but they only count the negotiated rate as a credit against the out of pocket/deductible. This big difference makes it very important to pick a doctor in-network. For your example: I would have paid $50 under the PPO, but $200 under the high deducible plan. If I go out-of-network I would have to pay whatever the doctor want me to pay, but the insurance company would only credit me $200 against my deductible. I can pull the extra $350 from the HSA. It is hard to get good pricing information from some doctors, but the price difference for me has been so large that in-network is the only way to go. For prescriptions the high deductible plan has been worse, because we pay the full price with no discounts for the medicine, until we reach the plan deductible. That makes the cost of the prescriptions as much as 10x's more expensive. In fact the annual cost of our prescriptions all but guarantees that we hit the deductible each year. You can designate one or more beneficiaries for your HSA account who will get the money when you die.  Some states require consent from your spouse (if you're married) if they are not the beneficiary. The funds maybe taxable to the beneficiary. If you don't designate any beneficiaries, by default the money will go into your estate and be handled the same as other assets.  The funds may be taxable by the estate. If you had any medical expenses before you died, it might be possible to pay them from the HSA. When looking around for information about this I would start with the IRS publications which are the authoritative source of this information.  Other articles you read are usually just summarizations of this information and can sometimes be incomplete or incorrect. http://www.irs.gov/publications/p969/ar02.html#en_US_2014_publink1000204096 While this question Can I get a rebate after using my HSA? mentions Health savings account the answer is still applicable. Go to the website for the plan administrator. They will either have a form to put the money back into the account, or they will have a contact number. In the past when I had an FSA I did this.  In one case I remember the doctor told us the bill would be X, but when they submitted the claim to the insurance the final bill was less than X so the doctor's office sent us the extra back. I was able to return the money back to the FSA administrator following their procedure.  Your situation is not unusual, accidental transactions happen all the time. Yes, absolutely.  The HSA, when used for medical expenses, allows you to essentially pay for your medical expenses tax free. Even if you don't have extra room in your budget, you can fund the HSA as you incur medical expenses, then withdraw money to pay the expenses, and you'll see an immediate tax benefit at tax time.  However, let's say that you have plenty of room in your budget and you don't have a lot of medical expenses. You already contribute the maximum to your 401(k) or IRA, and you want to do more. The HSA acts like a retirement account in this case, allowing you to contribute before-tax money and let it grow untaxed.  The HSA does have a huge benefit that no other retirement account has. If you choose not to reimburse yourself for medical expenses, but you keep track of the unreimbursed expenses you incur, then you can reimburse yourself for these expenses at any point in the future completely tax free. Essentially, your contributions are treated like a traditional IRA, but your withdrawals are treated like a Roth IRA, and can be done at any age. If you don't acquire enough medical expenses, you can still withdraw whatever is left at age 65 and those withdrawals will be taxed like a traditional IRA.  The HSA provides for tax-free contributions and growth if used for medical expenses, and tax-deferred growth if withdrawn after age 65 without medical expenses. If you know you will have a big bill, like braces. and you fully expect to hit the deductible then it can make sense. The deductible can trip some people up, because if they put too much into the limited purpose FSA and don't hit the deductible for the regular insurance policy, they can't get to all the money in the FSA. Because you have the ability to spend the potential money in the FSA before all the money has been contributed, it can allow you to make that payment for the braces in January. I did this the first year we had the HSA. I knew I needed to pay a dental bill early in the year. But the HSA would only have a few hundred dollars at that time, so I used the limited purpose FSA to be able to make that payment. This could also work if you spent a lot of money in the previous year. Because you have the ability to adjust how much money goes into the HSA each each pay period, this idea does keep the option open to fully fund the HSA if your finances improve. Regarding the deductible.  The law limits what you can use the limited purpose FSA for: dental and vision only. There is an exception. If you hit the deductible for the high deductible insurance policy, then you can use the funds in the limited purpose FSA for ANY medical reason.  When I did this a few years ago, I needed to send extensive paperwork to the company holding the funds before they would release the funds for dental. Once I sent them proof that I had met the deductible, then any medical expense after that date could use the FSA with minimal paperwork. If you fully fund the FSA beyond the cost of the braces, and then have a light year medical expense wise, you might not be able to spend all money in the FSA by the deadline. Regarding state taxes.  I saw no difference in my states (Virginia) treatment of the funds. The state taxable income number was exactly the same as the federal taxable income number. It did not treat the money in the FSA differently than the money in the HSA. The limits on an HSA are low enough that there's no real danger of overfunding it.  The limits max out at (as of 2011, for an individual) at just over $3000 per year.   Sometime in the next few years, you will have more than $3000 in health care expenses.  It might be something like a car accident, acid reflux, a weird mole that the doctor wants to check out, a broken toe, a few nasty cavities that need to be filled, an expensive antibiotic, or something else entirely.  Or, it might be something less dramatic, getting eaten away by copays and contact lenses. When that happens, you want the peace of mind that you can pay for your deductible plus any other expenses.  Keep in mind that even a $5000 deductible can cost you more than $5000 out-of-pocket; either because of non-insured expenses, or simply an illness that straddles multiple calendar years. Besides, it's not like your HSA money is going anywhere; even if you never touch it, it's just a savings account that you can't touch until you turn 65.  And if you do truly have an emergency, you can get at it if you have to. Even if your HSA is filled with several years' worth of deductibles, it's still a way to shield thousands of dollars a year from taxes, with luck moving them into lower-tax years 40 years from now.  And it's a way that doesn't involve income limits or mandatory withdrawals. I am currently switching careers and health insurance plans. I am interested in not rolling over and simply a withdrawal of my previous HSA account. What type of penalty would that be and who would I need to contact? The insurance company or the bank where the HSA is held? Here are the advantages to the HDHP/HSA option over the PPO option, some of which you've already mentioned: Lower premiums, saving $240 annually. Your employer is contributing $1500 to your HSA.  As you mentioned, this covers your deductible if you need it, and if you don't, the $1500 is yours to keep inside your HSA. The ability to contribute more to your HSA.  You will be able to contribute additional funds to your HSA and take a tax deduction. Besides the medical expenses applied to your deductible, HSA funds can be spent on medical expenses that are not covered by your insurance, such as dental, vision, chiropractic, etc.  Anything left in your HSA at age 65 can be withdrawn just like with a traditional IRA, with tax due (but no penalty) on anything not spent on medical expenses. With the information that you've provided about your two options, I can't think of any scenario where you'd be better off with the PPO.  However, you definitely want to look at all the rest of the details to ensure that it is indeed the same coverage between the two options.  If you find differences, I wrote an answer on another question that walks you through comparing insurance options under different scenarios. This is referred to as an HSA Mistaken Distribution. An HSA mistaken distribution occurs when you take a distribution and later find out that it is not for a qualified medical expense.  For example, this could occur if you accidentally pay for a restaurant dinner with your HSA debit card.  It can also occur if you take a distribution to pay for a medical expense, but then are later reimbursed by insurance. This is discussed in the instructions for IRS forms 1099-SA and 5498-SA.  (Note: these forms are submitted by the HSA bank, not the consumer, so the instructions are addressed to them.) HSA mistaken distributions.   If amounts were distributed during the year from an HSA because of a mistake of fact due to reasonable cause, the account beneficiary may repay the mistaken distribution no later than April 15 following the first year the account beneficiary knew or should have known the distribution was a mistake. For example, the account beneficiary reasonably, but mistakenly, believed that an expense was a qualified medical expense and was reimbursed for that expense from the HSA. The account beneficiary then repays the mistaken distribution to the HSA.  You have until April 15 in the year following the refund to repay the HSA and avoid the extra tax and penalty that should be paid if you were to keep the distribution that was not ultimately used for medical expenses.  When you send the money to the HSA bank, you need to explicitly tell them that it is a mistaken distribution repayment, so that they can report it to the IRS correctly and it will not affect your contribution limits. "As others have mentioned, you avoid ""payroll taxes"" (Medicaid, Social Security, etc) by using pre-tax money rather than post-tax money. However, there is one benefit to getting your own privately held one: you can choose the service provider.  A previous employer's HSA charged $4/month, and did not allow me to invest in any funds unless I had over $4k in my account.  However, a single year's maximum contribution is less than $4k, so it was stuck in a money market account perpetually. The tax saving probably is larger than both your monthly fees and your investment gains, but the HSA provider's rules are another (fairly-opaque) consideration." When you take any money out of an HSA, you'll get a 1099-SA. HSAs work a little differently than a 401(k).  With a 401(k), you aren't supposed to take any money out until retirement.  HSAs, however, are spending accounts.  I take money out of my HSA every year. As long as you spend the money you take out of your HSA on qualified medical expenses, there are no taxes or penalties due.  The bank that holds your HSA doesn't know or care what you spend the money on; they will certainly allow you to empty your HSA account.  Anything you take out will be reported to the IRS (and to you) on a 1099-SA.  At tax time, along with your tax return, you send in a form 8889, on which you report to the IRS what you took out of HSA, and you also certify how much of that money was spent on medical expenses.  If any of it was spent on something else, taxes and penalties are due. There are a whole host of types of filings. Some of them are only relevant to companies that are publicly traded, and other types are general to just registered corps in general. ... and many more: http://reportstream.io/explore/has-form Overall, reading SEC filings is hard, and for some, the explanations of those filings is worth paying for. Source: I  am currently trying to build a product that solves this problem.