Here are 4 ways health savings accounts can be used to pay insurance premiums

cnbc.com:

Health savings accounts have powerful tax benefits that make them an efficient way to save for future medical costs.

But to harness their full potential, HSA funds must be used for qualified medical expenses.

There's a long list of qualifying costs — from artificial limbs to birth control pills, lead-based paint removal and fees to attend medical conferences. (Approved costs are those that generally qualify for the medical and dental expenses tax deduction, the IRS said.)

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Insurance premiums — one of consumers' main ongoing health-related costs — generally don't qualify. However, there are four exceptions to this rule, according to the IRS. They are outlined below.

HSAs carry a triple tax advantage: Account contributions are tax-free, as are investment earnings and withdrawals if used for qualified expenses.

Consumers can use HSA funds for a non-qualified purchase — but they'd lose a prong of the three-tiered tax benefit. A withdrawal would be taxed as income, similar to the way a pre-tax 401(k) or individual retirement account works.

In an ideal world, consumers would be able to fully fund their HSA each year and pay for current health costs out-of-pocket, leaving the accounts untouched until retirement, according to financial advisors.

«The compounding of earnings could fund all your health care when you're old,» said Carolyn McClanahan, a physician and certified financial planner, based in Jacksonville, Florida.

But it's not always possible to use HSAs that way — especially for lower and