HSA Basics

An HSA is a type of savings account called a Health Savings Account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars to pay for eligible health expenses, you can lower your overall health care costs.

In general, anyone can open an HSA with some limitations.

However, only those who are covered by a qualifying high-deductible health plan (HDHP) are eligible to make or accept contributions to their HSA. Some additional contribution limitations are: you must not be enrolled in Medicare and you must not be claimed as a tax dependent on someone else’s tax return. There are other more rare limitations, consult with a tax professional if you have more questions.

In general, anyone can contribute to an HSA you own.  Most commonly, the account holder, and/or their employer contribute to HSA accounts. What is most important are the conditions that allow you to accept contributions into your HSA account.   There are two basic requirements:

  1. You are on a High Deductible Health Plan (HDHP)
  2. You do not have additional disqualifying coverage

Check with your employer or the health plan you purchase to make sure that it is a qualified HDHP plan before making or accepting contributions.

Disqualifying coverage

Examples that would not permit HSA contributions:

  • You cannot be covered by Medicare part A, B, C or D
  • You cannot be covered by a general purpose FSA or HRA – this can also sometimes happen through a spouse.  Important note: Limited Purpose FSA (“LFSA”) are allowed to be used in conjunction with HSAs and are often paired with an HSA in an employer’s health plan
Please consult your employer and tax advisor to make sure of your eligibility for contributions.

No. Once opened, HSAs are yours forever and funds in them are NOT “use it or lose it”.  All contributions remain in the HSA until you spend it. So open one today!

Most HSAs provides you a debit card that you may use to make purchases (Zenda’s is special and extra awesome)!  You may also reimburse yourself if you paid for a health expense with cash, or another card.  Simply go into app to create an expense and reimburse from your HSA to Everyday account.


The IRS requires that eligible health expenses be incurred AFTER your HSA account was opened.  Note, the account does not have to be funded.  So, once your Zenda HSA has been opened, you can track your eligible expenses and then withdraw them from your HSA at any point in the future, tax free.

Why should I use Zenda as my HSA?

Zenda is focused on helping you get the most out of your HSA.  We have you covered whether you want to make it easy to purchase eligible items, find the maximum tax savings, reduce your need for receipt tracking or maximize the growth of your HSA.

We do this by adding intelligence right into the Zenda debit card – which is smart enough to spot medical expenses you may have missed.  It is also smart enough to automatically create a proof of purchase usable if you are audited by the IRS and they ask about your medical expenses.  When Zenda automatically finds an expense for you – we believe so strongly that our process is correct, that we stand behind them with Zenda Audit Protection.

Zenda provides two accounts when you sign up, both owned by you – one HSA and one we call Everyday.  The Everyday account is much like a traditional checking account that you would have at your main bank.  You can move money freely between the Everyday account and any of your regular bank accounts using the Zenda mobile app.  The Zenda debit card is associated with both accounts, and the card is smart enough to identify medical expenses and charge those to your HSA account, while other expenses get charged to your Everyday.


For example, let’s say you head to the drug store and buy aspirin, a box of band-aids, a bottle of water and a package of potato chips. If you use the Zenda card to pay for all these (just one swipe!), then we are able to determine which of those are medical expenses and which are not.  Perhaps you knew which items were eligible, or perhaps not.  Either way, we spot the eligible items and get you the tax savings.  This is all done in real time and then we simply take the correct amount out of each account (HSA, Everyday) while the card pays the bill in a single transaction.  Magic!

Zenda’s Audit Protection generates a proof of purchase document for each allowable expense that has been automatically identified through use of the Zenda card.   This can be provided in the event the IRS challenges the validity of a qualified medical expense in an audit.  If the IRS denies the validity of the expense,  Zenda will pay the penalty that IRS may assess on that expense.

The best way to get Zenda is for your employer to offer it as part of it benefits package.  Talk to your HR team and have them reach out here.  This allows you to benefit the most from pre-tax contributions through payroll.

We are accepting interest from individuals here who want their own account without employer sponsorship – and will reach out when we make this available.