Spending with your HSA

The IRS defines a qualified medical expense (QME) as the cost to diagnosis, treat, or prevent disease and includes equipment and supplies needed for those purposes.

You can use your HSA to pay for doctor's visits, hospital services, surgery, and medications, to name a few. For a full list, see IRS Publication 502.

You can use your HSA money to pay for qualified medical expenses (QMEs) for your spouse and dependent children as long as everyone meets eligibility requirements and you, the account owner, have authorized each of them by requesting an additional HSA debit card in their name. Debit cards are only available for the Fidelity HSA^®.

Direct-deposit contributions from a linked bank account are usually available in your HSA within a few hours. Transfers from other HSAs or an IRA are usually available in your HSA within a few business days, once Fidelity receives the money from a third-party provider. Please see our guide to moving money with Fidelity for more information.

If you don’t have enough set aside in your core position in your HSA, you can pay for your qualified medical expense out-of-pocket now and reimburse yourself later, once you have enough money in your HSA. If you’re investing your HSA money, you can sell some of your investments any time, and that money will be available to use when the trade settles, usually within a few business days.

You can choose to cash out your HSA any time, but if you're not using the money to pay for qualified medical expenses, your withdrawal will be subject to taxes and may be subject to penalties.

You can order cards for yourself and supplemental cards for your spouse and eligible dependents.

You can withdraw your HSA money penalty-free any time before or during retirement to pay for qualified medical expenses. If you use it for any other expense before retirement, your withdrawal will be subject to taxes and may be subject to penalty. If you use your HSA money for any other expense after age 65, you'll just have to pay the taxes, and you won't be penalized. Please see IRS Publication 502 for a complete and up-to-date list of qualified medical expenses.

If you use your HSA money on something other than qualified medical expenses before retirement, your withdrawal will be subject to taxes, and it may be subject to a 20% penalty. If you use it for something other than qualified medical expenses after age 65, your withdrawal will be subject to taxes but not penalized.

Your HSA is always yours, so you can still spend your HSA money on qualified medical expenses with no federal income taxes or penalties in retirement.

Retirement-related qualified medical expenses, covered by your HSA, could include:

• COBRA coverage costs
• Health care coverage while you’re receiving unemployment benefits
• Medicare premiums other than Medicare Supplemental coverage
• Qualified long-term care coverage

If you choose to use your HSA money for something other than qualified medical expenses, you will be responsible for paying federal income taxes on it and may be penalized if you’re under age 65. You’ll also still be eligible to contribute to your HSA in retirement as long as you aren’t enrolled in Medicare or covered by an ineligible health plan.

Keep all your receipts for your out-of-pocket qualified medical expenses as well as documentation for your claims and your explanations of benefits (EOBs).

To make a repayment to your Fidelity HSA, submit a completed "Fidelity HSA^® Return of Mistaken Distribution" form to Fidelity in accordance with applicable instructions.

You can pay for any qualified medical expense out of pocket and reimburse yourself anytime from your health savings account (HSA)—there's no cutoff date. The expenses must have occurred since opening the HSA.

You're eligible to open and contribute to an HSA if you are:

• Enrolled in an HSA-eligible health plan
• Not covered by another health plan
• Not enrolled in Medicare
• Unable to be claimed as a dependent on someone else's tax return

An HSA-eligible health plan, also known as a high-deductible health plan (HDHP) is a type of health plan you need to be enrolled in to be able to contribute to an HSA. Beginning 1/1/26, Bronze and Catastrophic plans available on an Affordable Care Act exchange will be treated as HSA-eligible health plans.

If you opened an HSA while ineligible, call Fidelity to close your HSA. There are no taxes or penalties for opening an HSA while ineligible, as long as you don't make contributions to it. Any contributions you do make will be subject to federal income taxes and/or penalties. Keep in mind: Even if while ineligible, you can consolidate any old HSAs into one HSA using a direct custodian-to-custodian transfer.

An HSA-eligible health plan may cost less than other health plan types. Typically, they have higher annual deductibles and maximum out-of-pocket limits, but have lower monthly premiums.²

Your HSA is always yours, even if you change health insurance plans. However, if you switch to a health plan that is not HSA-eligible, you will no longer be eligible to make future contributions to your HSA.

Investing your HSA money can help your savings grow over time, with any growth free from federal income taxes. This can be a great way to help cover the costs of health care in retirement.

You can invest your HSA money in a broad range of individual stocks, mutual funds, and other securities. Learn more about HSA investing.

You can buy and sell your HSA investments as often as you like. However, you will be subject to standard commissions and investment-related fees. See www.fidelity.com/commissions for more information.

The SIPC protects your uninvested HSA money, up to $500,000. If you choose to invest some or all of your HSA money, those investments could lose money. All investing involves risk, including risk of loss.³

Accessing your invested HSA money is as simple as selling your investments in the same way you’d sell any other investment. The money should be available for withdrawal when the trade settles, usually within a few business days.

When you open a new Fidelity HSA^®, we automatically put your uninvested cash into the Fidelity^® Government Cash Reserves, but you can also choose another cash option. Understanding the differences between your core options can help you make the choice that's right for you. Below are the HSA core options available to you:

Fidelity^® Government Cash Reserves (FDRXX) money market fund⁸
Money market funds are mutual funds that invest in short-term debt securities issued by short-term, high-quality entities that borrow money to repay principal and interest to investors within a short time period. Money market funds have different characteristics than a bank sweep so read the fund's prospectus carefully. 


or

Fidelity's FDIC Insured Deposit Sweep Program⁹
Through the program, the uninvested cash balance in your Fidelity HSA^® is swept to one or more program banks where it is eligible for FDIC insurance. For more information, please refer to the FDIC-Insured Deposit Sweep Program Disclosure (PDF) and the Fidelity Health Savings Account (HSA) Program Banks list.

Interest rates or yields may vary due to market conditions.

The option to choose your position appears during account opening; however, you can also change it at any time.

1. Log in to Fidelity.com and select your Fidelity HSA^® account. In the Positions tab, select Core or FDRXX.
2. Select the Change core position button.
3. Select FDIC or Fidelity Government Cash Reserves (FDRXX), then click "Preview order," and "Submit."

Switching is free and will not change your ability to access or invest this money.

There are no fees for opening a Fidelity HSA^®, which you invest yourself, or a Fidelity Go® HSA, which Fidelity manages and invest for you. However, with a Fidelity Go^® HSA¹¹, your account balance must be at least $10 for us to invest your money according to the investment strategy you've chosen.

When investing for yourself in a Fidelity HSA^®, mutual fund expenses will still apply, as do commissions, interest charges, and other expenses related to transactions or holding specific investments.

If you have a Fidelity HSA^® through your employer, your account may be charged an administrative fee of up to $12 per quarter ($48 annually), unless it’s paid by your employer. That administrative fee may be waived for households established before a certain date and meeting certain asset minimums at Fidelity.

When you enroll in a Fidelity Go^® HSA, you turn the day-to-day investment decisions for your money over to a team of experienced professionals, who provide this service for a fee. Based on information you provide, these professionals invest your money to help you meet your investment goals. Most of your experience with Fidelity Go^® takes place online—including providing information about yourself, opening your account, and tracking your investments. For more information, go to fidelity.com/go.

Even though Fidelity Go^® HSAs are intended for investing goals of three years or longer, you can still reimburse yourself for qualified medical expenses you pay out-of-pocket by submitting a withdrawal request. When you do, we'll sell securities in your account for you. After the money has settled, which can take up to ten business days, we'll send it to you by check, electronic funds transfer (EFT), or transfer of funds to another account.

There is no minimum balance required to start investing your Fidelity HSA^® money. However, certain mutual funds may have minimum investment requirements.

In the Fidelity HSA, contributions, qualified withdrawals, and investment growth are all federal income tax-free.

Form 1099-SA reports all withdrawals, including charges to your HSA debit card, you have made from your HSA during the tax year. You should report the withdrawal amounts from Form 1099-SA on Form 8889 only if you withdrew from your HSA.

Form 5498-SA summarizes your HSA contributions, holdings, and fair market value. This form is informational only and does not need to be filed with your taxes. Please refer to our tax information guide for further details.

Fidelity will complete and file form 990T on your behalf, if necessary. This form only applies to investments in limited partnerships, so most HSA owners should not expect to need or receive one of these.

Since assets are transferred directly from trustee to trustee, this is a non-reportable transfer, and there will be no tax forms to worry about. Don't include the amount transferred in income, deduct it as a contribution, or include it as a distribution when you file your taxes. You can process an unlimited number of TOAs per year and they're not subject to annual contribution limits.

You can view your contributions history on your Portfolio Summary page after you log into Fidelity.com.

To avoid taxes and penalties on HSA money, spend it only on qualified medical expenses (QMEs). Keep in mind, some states tax HSA money.