In a HSA (Health Savings Account) what is a qualified withdrawal?

Answer 1

Any medically related expense - doctor's visit, prescription, lab tests, emergency room, hospital, surgeons, etc., even wheelchairs, air conditioners, and the like, if authorized by the care giver as "medically necessary".

Answer 2

A qualified withdrawal can vary depending on your HSA. It could cover some alternative medicine -- like chiropractors and osteopaths -- depending on the plan and what is allowed. The exact rules for your HSA will be spelled out in the documentation you get.

You have to be careful when estimating how much money you want to contribute to an HSA. The issue is that any money left in the account will be "lost" to you. So, you want to put in the right amount, no more and no less (but preferably you would err on the side of too little rather than too much.)

In most cases, an HSA will give you the best bang for the buck if you already have insurance for most of the standard medical procedures, and you are looking for a way to get more preventative / alternative medicine covered. Since alternative medical practitioners are often not covered under regular health insurance, and are also usually not considered a tax deduction, the HSA really works in your favour then.

Answer 3

It is when you take a withdrawal out to pay for medical expenses.