What can HSA funds be used to cover?
HSA distributions are tax-free if used for eligible medical expenses as defined by Internal Revenue Code Section 213(d). Noneligible distributions will be taxed as part of gross income and will incur a 10% penalty. After age 65, the 10% penalty is dropped, though the distribution is still treated as taxable income. Eligible medical expenses include doctor’s office visits, predeductible amounts and coinsurance.
