HSA’s : Health Savings Account (Physicians)
Maximising Your HSA: Common Mistakes for Physicians to Avoid
A Health Savings Account (HSA) can be one of the most powerful tools for managing health care expenses while building long-term financial flexibility for physicians.
Yet even well-intentioned physicians can miss opportunities. Here are 10 common HSA mistakes to avoid:
1. Not Contributing the Maximum
Failing to reach the IRS-set contribution limits each year means missing out on tax savings and potential account growth.
2. Using Funds for Nonqualified Expenses
Withdrawals for nonmedical expenses incur taxes and penalties. Always use HSA funds for qualified health care costs and keep clear records of expenses.
3. Failing to Keep Receipts
If audited, you’ll need proof that HSA withdrawals were for eligible expenses. Organised recordkeeping protects your tax advantages.
4. Missing the Contribution Deadline
You can contribute up until the tax filing deadline for the previous year. Missing it means losing out on that entire year’s tax benefits.
5. Not Investing Your HSA Funds
Leaving funds in cash may feel safe, but many HSAs allow investing. Growing your balance over time better prepares you for future medical costs.
6. Overlooking Employer Contributions
If your employer offers an HSA contribution, don't leave free money unclaimed. Always maximise any available employer benefits.
7. Misunderstanding Medicare and HSA Rules
Once enrolled in Medicare, you can no longer contribute to an HSA although you can still spend existing funds on qualified expenses. Knowing when contributions must stop is key.
8. Making Errors with Rollovers and Transfers
Rolling over HSA funds or transferring from other accounts requires careful compliance with IRS rules to avoid taxes or penalties.
9. Not Naming a Beneficiary
Without a designated beneficiary, your HSA funds may go through probate. Keeping your beneficiary updated ensures smooth transfer if needed.
10. Ignoring State Tax Implications
Federal tax benefits are clear yet not all states treat HSAs the same way. Ensure you check your state’s rules to avoid unexpected tax costs. ¹
Person, David B. Mandell, J., Mandell is an attorney and founder of OJM Group., Jason M. O’Dell, M., & O’Dell is the managing partner and financial consultant for the wealth management firm OJM Group. (2025, April 23). 10 common mistakes made in health savings accounts: What physicians need to know. Healio. https://www.healio.com/news/hematology-oncology/20250423/10-common-mistakes-made-in-health-savings-accounts
