FREQUENTLY ASKED QUESTIONS AND ANSWERS FOR
HSA
HEALTH SAVINGS ACCOUNT
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Questions:  27, 28, 29, 30, 31, and 32

27. Can I use my Health Savings Account for non-medical expenses?

The answer is, yes, you can spend money out of your Health Savings Account for non-medical expenses, but you have to pay income tax and a 10% penalty for a non-medical withdrawal prior to age 65.

28. Once I qualify for Medicare (hit the age of 65 yrs. old) can I get a Medicare Health Savings Account?

Not yet.

29. What if I die, what happens to the money in my Health Savings Account?

The HSA goes to your named beneficiary. If you designate your spouse, the money is tax-free. If your beneficiary is someone else, he or she generally will owe income tax but no penalty.

30. What happens to my Health Savings Account funds when I die? Can I leave it to my children?

If the named beneficiary in your will is your spouse, the spouse continues to access the Health Savings Accounts funds tax-free for medical expenses and pay income taxes on any non-medical expense. If your beneficiary is anyone else, then they will generally owe income taxes when the assets move to them, but no penalty. 

31. Does a normal high deductible ($5000) medical insurance policy qualify as a HSA policy?

Please see the question and answer to "Do I have a HSA qualified health insurance plan?"

32. What accountability is required for how the money in the HSA is spent? i.e. If I spend $1200 on prescriptions using my American Express card can I then reimburse myself from the HSA? Is the administrator responsible to ensure all expenses are valid?

The administrator is not responsible for what someone with an HSA spends the funds on; the HSA holder is the one responsible. Yes, you can reimburse yourself.