If you have a Health Savings Account attached to your high-deductible health plan, you likely know that you can use it to get reimbursed throughout the year for medical expenses. But HSAs have another benefit: There’s no time limit on getting reimbursed. As long as you had the HSA open when you accrued a medical bill, you can get reimbursed for the cost—even years after the fact.
That’s important, because even though HSAs have an annual contribution limit (in 2019, it’s $3,500 for individuals and $7,000 for families, and $1,000 more if you’re over 55), it means that if you have high medical expenses one year, you can still get reimbursed for any excess costs with contributions in future years.
Let’s say you decided to contribute $1,000 to your HSA last year but then had unexpected medical costs totaling around $4,000 out-of-pocket. This year, you could contribute the maximum to your HSA and then get reimbursed for last year’s expenses. The only requirement is that you opened the HSA before you incurred the costs. Writes CreditCards.com:
It is very important that you keep accurate records to document the transactions, in case you are ever audited. The first step is to keep a copy of every medical bill you have personally paid and of the payments. “As long as the dates are on the receipts, you should be fine,” says [John W. Seltzer, CEO of J. Seltzer Associates, an employee benefits advisory firm].
So if you have an HSA and medical expenses that you didn’t get reimbursed for last year or in years prior—either because you didn’t allocate enough during Open Enrollment or you simply forgot to use your HSA funds—round up your receipts and send them in to your provider now (you may be able to increase your contributions during the year, but likely not if your elections are made as a pre-tax salary reduction, i.e., through your employer plan). And keep this in mind when you’re setting up HSA contributions for next year.