Can I put rules in place that keep employees from using their HSA money for non-medical expenses?
Good question. As our Consumer FAQ answers, employees can technically use their HSA money for anything—even non-medical expenses. However, any money used for non-medical expenses is subject to full taxation as well as a hefty 10% penalty tax. Placing additional rules on HSAs through your benefit plan is, simply, a bad idea—it triggers ERISA requirements that your HR department very likely can’t cover (and certainly won’t want to). We recommend you let the IRS’s penalty discourage employees from using their HSA for non-eligible expenses.
Related Questions
- How much money will this save me on taxes? Is an HSA preferable to just deducting medical expenses on my income tax?
- Can I put rules in place that keep employees from using their HSA money for non-medical expenses?
- Can I use the money in my HSA to pay for qualified medical expenses for a family member?
