What if I use HSA funds for a non-qualified expense?

The distribution will be subject to income tax, and you may also incur a 20% penalty, depending on your age and circumstances.

If you accidentally use HSA funds for a non-qualified expense, you may be able to return the funds to your account before the tax filing deadline for that year. For assistance, please contact Lively at support@livelyme.com.

Source: Internal Revenue Code 223, Health Savings Accounts