In this video you will learn the limitations of using funds from a Health Savings Account (HSA) and the specific individuals eligible to benefit from it:
- Despite the money in your HSA being your own, it can only be used for specific individuals, namely you, your spouse, and your dependents.
- There’s a common question about whether HSA funds can be used to assist a friend in paying for their medical bills. However, the IRS regulations are clear that only the account holder, their spouse, and dependents can access HSA funds.
- Attempting to use HSA funds for someone who doesn’t meet these criteria typically falls under a “non-qualified distribution,” which may lead to tax penalties.
- In essence, the government restricts the use of HSA funds to the account holder, their spouse, and dependents, even if there is a desire to help others with medical expenses.
