The Power of your HSA as a health, savings, investment and emergency fund account.

Created by Christopher Caffrey, ACNP, PMHNP

February 26th 2025

Let’s talk about the most criminally underrated financial hack that most people are sleeping on: the Health Savings Account (HSA).

Now, you may be thinking. “Oh great, another boring financial account that I don’t understand and will never use.”

Wrong.

If you’re using your HSA just to pay for flu shots and copays, you’re doing it wrong.

If you’re not using an HSA at all, you’re leaving money on the table.

Because here’s the reality: an HSA isn’t just a “medical savings account.” It’s a supercharged, tax-free, legally sanctioned loophole that lets you invest, build wealth, and cover way more expenses than you think—all while keeping more of your hard-earned money away from the IRS.

And here’s the best part: with a simple Letter of Medical Necessity, you can unlock an entire world of “medically eligible” expenses that are normally not covered—like your gym membership, fitness classes, red light therapy, and even your therapeutic mattress (yes, your bed).

So, let’s break down why your HSA is the most powerful financial tool you’re probably ignoring, how to 3X your savings, and how to use a Letter of Medical Necessity to expand what your HSA can pay for. And remember, this is not financial or legal advice, but it is something being familiar with HSA's, can be done.

First, What Makes an HSA So Special?

I’ll keep this simple. An HSA gives you three major tax advantages:

You don’t pay taxes on the money you put in (lowers your taxable income).
You don’t pay taxes on the money as it grows (unlike regular investments).
You don’t pay taxes when you withdraw it—as long as it’s for medical expenses.

It’s basically the financial equivalent of having your cake, eating it, and then getting a tax break on top of it.

But wait, it gets better.

Unlike FSAs (Flexible Spending Accounts), which are the "use it or lose it" of healthcare savings, HSAs never expire. The money rolls over forever, meaning you can stack tens or even hundreds of thousands of dollars tax-free.

How to Max Out Your HSA and 3X Its Value

So now that you’re actually paying attention, let’s talk strategy.

Step 1: Contribute the Maximum Allowable Amount

For 2025, here’s what the IRS lets you contribute:

$4,300 per year (if you're single)
$8,500 per year (if you have a family)
Extra $1,000 per year if you're 55 or older (a.k.a. “catch-up” contribution)

Now, most people just toss some money in their HSA and use it for random doctor visits and prescriptions. But that’s not how you play this game.

Instead, think of your HSA like a long-term investment account.

Step 2: Invest Your HSA (Because Letting It Sit in Cash Is Dumb)

Here’s where most people screw up their HSA.

They leave it sitting in cash, earning 0.00001% interest (or whatever insultingly low rate your bank gives you).

BIG MISTAKE.

Your HSA isn’t just a medical savings account—it’s an investment account too.

Many HSA providers let you invest in:

Stocks
ETFs & Index Funds
Real Estate (yes, really)
Bitcoin (Yes, Bitcoin! Studying bitcoin may be one of the single most important and asymmetric asset investment for wealth generation moving forward)

Imagine you max out your HSA for 30 years and invest it in an S&P 500 index fund (which averages ~8% annual returns).

Your HSA balance would grow to over $1 MILLION.

And guess what? It’s all TAX-FREE.

Step 3: Don’t Spend It—Yet

Most people immediately use their HSA to pay for medical expenses.

Don’t do that if you can.

Instead, pay out-of-pocket for medical expenses and let your HSA investments grow tax-free for decades.

Why? Because there’s no deadline for reimbursing yourself.

You can save your medical receipts today and withdraw the money later when your investments have grown.

Example:

You pay $2,000 for surgery today out of pocket.
10 years later, your HSA has tripled in value from investing.
You reimburse yourself $2,000 TAX-FREE, but now your remaining HSA balance is way higher.

How to Use Your HSA as an Emergency Fund & Retirement Account

What if I told you that your HSA is actually better than your 401(k) or IRA?

Here’s why:

Before age 65: If you use your HSA for non-medical expenses, you’ll pay income tax + a 20% penalty.
(But...If you have receipts from prior medical expenses paid out of pocket, like paying for a $2,000 for surgery in the example above, you now have the permission to take out $2,000 any time you want for any expense you choose. You can pay any expense with a credit card and pay the credit card bill with your HSA. Many people do not realize you may requests checks, just like a bank account, from your HSA account). Power to the people!
After age 65: You can withdraw from your HSA for anything (medical or not) with NO PENALTY—just like a ROTH IRA.

Translation? Your HSA can double as an emergency fund AND a retirement account.

So if you’re tight on cash in life or retirement, your HSA gives you completely flexible withdrawals.

How to Get Your Gym Membership & Supplements Covered by Your HSA

Alright, now here’s where things get fun.

Most people assume their HSA only covers doctor visits, prescriptions, and hospital bills. And the law suggests this as well.

But what if I told you that your HSA could pay for your gym membership, cold plunges, home sauna, and red light therapy?

Legally.

The Secret: A Letter of Medical Necessity (LMN)

A Letter of Medical Necessity (LMN) is a simple doctor’s note that proves your health intervention is medically Necessary.

With an LMN, your HSA can cover:

Gym Memberships
Fitness Classes (Pilates, CrossFit, Yoga, etc.)
Home Gym Equipment (Treadmills, Dumbbells, etc.)
Cold Plunges & Ice Baths
Red Light Therapy Devices
Home Saunas
Therapeutic Mattresses
High-Cost Supplements (Like Mushroom Coffee, Collagen, Protein or Athletic Greens)
...and more!

Translation? You just saved 30% on all these expenses because they’re now paid with pretax dollars. And all of that justifies future money being withdrawn from your HSA for anything in the future without tax or a fee.

How to Get a Letter of Medical Necessity (Without Begging Your Doctor for One)

Most primary care doctors don’t even know what an LMN is (or they’ll give you a hard time about writing one). Or they will miss crucial details that the law may reject.

That’s where FlexUp Wellness PLLC comes in.

FlexUp Wellness makes it insanely easy to get a Letter of Medical Necessity online in just 2 minutes and only 47 bucks. They are experts in the details and will get you covered.

Go to FlexUp Wellness and unlock tax-free fitness & health spending today.

Flexup Wellness, PLLC