Posted by William Charles on March 5, 2019
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Published on March 5th, 2019 | by William Charles

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FSA/HSA Cards Can Now Be Used Directly On Amazon

It’s now possible to use FSA/HSA cards directly on Amazon. Amazon has provided a useful F.A.Q here (our affiliate link and below) and eligible products should be listed as ‘FSA or HSA Eligible’. In addition you can find a full list of HSA/FSA eligible products here. Keep in mind you’d be better off using a credit card that earns at a high rate on Amazon for these purchases and then reimbursing yourself

 



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Burton
Burton

The FSA/HSA eligible tag is the highlight here. I remember when I used to have FSA trying to figure out how to spend the balance before it expired. Now I have HSA and wish that I had a balance at the end of the year!

Chris
Chris

Can you explain why you wish you had a balance at the end of the year? I have an HSA account as well. Thanks in advance.

RD
RD

Re: balance

he’s talking about FSAs–which are use it or lose it. This doesn’t apply to HSAs.

Jeff
Jeff

You can invest an HSA free of capital gains. Current laws permit for withdrawals for any purpose (not just for medical expenses) after age 65 penalty free, however you will pay taxes at your income rate at the time. It is like another savings and investment vehicle akin to an IRA or 401k.

Mike L
Mike L

With an HSA, you can roll over any balance remaining at the end of year. With an FSA, you can’t. You’ll lose anything left in the account at the beginning of the new year.

Snorlax
Snorlax

More importantly, capital gains in an HSA are tax free.

Burton
Burton

What Jeff said, plus it would mean I didn’t have over $7k of out of pocket medical expenses. HSA balances don’t expire like FSA.

Kids are expensive – I got a new credit card shortly after each was born to pay the dozens of different bills we received over the subsequent months. It makes tracking easy plus no issues meeting the min spend requirement.

Aby
Aby

Hello Burton, I have a HSA setup and i received a debit card to use for health care expenses … Are you suggesting I can use a regular credit card and then request reimbursement and totally ignore the debit card i received?

By the way which credit cards you applied for each baby expenses? we are due in June

Hari
Hari

I’d pick high bonus cards specifically Chase cards to start with if you are under 5/24. Easy 3-5K spend possible with medical expenses and reimburse them through HSA.

Jeff
Jeff

Yes, Aby. As long as your HSA was open when the medical expenses occurred, the way the laws are currently (and I keep noting that because they could be amended), you can make a claim for reimbursement no matter how you paid (ie. a credit card you want to meet minimum spend on) as long as you have documentation (ie. receipts). This works out advantageously in the event you can keep your moment invested over a long period of time. Theoretically, you could make a (penalty free) claim in 30 years for medical expenses from today, benefiting from three decades of that money’s tax-free growth in the market.

Aby
Aby

wow Jeff I never knew that about HSA .. this is my first year with HSA so still learning … now need to figure out what High spend card shall I apply to pay for the expenses this year 😀

Burton
Burton

Check out Doc’s “Best Current Credit Card Sign Up Bonus” page and pick one that fits your spending and is easy to redeem. You should be able to get at least $500 in value back and no annual fee or first year waived. The card I added last summer is a Citi card that is no longer on that list so perhaps the bonus was reduced.

If you plan to get a bunch of credit cards there is some strategy to it but if you are only planning to get 0-2 a year you can just sign up for one with a big signup bonus that you can get back in cash or use easily.

Electroman
Electroman

FSAs can also roll over, although most don’t. Mine definitely features rollover. Employers can offer a FSA with a rollover *or* with a grace period, but not both,

Frank
Frank

Just to add: you actually SHOULDNT reimburse yourself via the HSA — let the balance grow and it becomes a completely untaxed IRA. Just save the receipts so you can pull the funds if you ever need cash.

Luis
Luis

“You Shouldn’t”

Sure, what if the person doesn’t make enough to cover the expenses out of pocket?

Frank
Frank

Then that person doesn’t have enough money to save for retirement (that year). Obviously if it’s a matter of can’t pay the bill then dip into those funds but you are giving up big tax benefits.

Only thing better than HSA is 401k match so if you are putting funds elsewhere then you would have been better off holding those funds to pay for the medicial expenses

Burton
Burton

@Luis I think the most important thing is that you max out your HSA contribution. If you use your funds so be it – you are still reducing your current year taxable income by $7k (mfj). Leaving it in there for tax free earnings towards retirement is great but not practical for everyone.

With my plan choices the HSA eligible plan was so much cheaper than the normal copay plan that the savings basically allowed me to max out the HSA contribution. I do a ROTH IRA that is more flexible than my HSA and has lower fees so I’m not as concerned about taking withdrawals from my HSA as long as I’m maxing out my contributions to both.

jt
jt

Disclaimer: not investment advice, just personal opinion
I wish I had an HSA account. My wife had 1 for 1 year, and after looking into it, it is best to invest that money (it grows tax free) and just reimburse yourself later. Think about it this way, it’s essentially like a 401K. (pre-tax, grows tax free) Ask yourself, even if there were no tax penalty, would you draw out of your 401k to pay your medical expenses now? How you answer would pretty much answer the question “should I draw money out of my HSA now for med expenses now?”

PK
PK

you need to have eligible medical plan to contribute HSA. my employer offer high deductible plan but its not tagged as HSA eligible. I wish i can contribute some money to HSA. How does IRS keep track of your medical plans being eligible here ?

Angela
Angela

the FAQ link doesn’t seem to be working. Also, amazon will not allow you to check out with an HSA/FSA card because you have to add it to your payment methods. that means it will be preauthorized to determine if it is a valid card, and this will not be accepted because it’s not actually making a n HSA/FSA eligible purchase at that moment. i now have to call amazon to see if they can do a direct authorization for my purchase without the whole “add a new payment method” nonsense.

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