I was thinking HSA withdraws are tax free- so that is a tax benefit.

On a more practical level, I do some mental accounting...health
insurance plus HSA is the "medical expense" budget for the year. Some
(or all) of the HSA rolls forward in a "healthy" year, but that's good,
it will help in a more costly one. But at a certain point, it's enough.
Even the HDHPs have out of pocket maximums that aren't all that high,
and with family coverage you can add another $5800/year, going up
annually. So you start thinking about questions like "what if I die
before using that up?" or "do I have too much spooling up in
tax-deferred accounts?" or "isn't it likely the health insurance scheme
will change substantially by the time I retire?" There's a bird-in-hand
aspect to just writing that check now, and a risk of "hoarding" for a
day that never comes.

What is your thinking about not using money in an HSA for medical expenses
if you can afford to pay from your other resources, to allow the HSA to
build up. Assume a healthy, well off person, 50 years old, little medical
expenses or needs. If they pay what little medical expenses they will
have out of pocket, their HSA will continue to build in value.

related questions:

once you are on Medicare, can you still have an HSA qualified insurance
coverage (like Medicare plus or some such thing) and still contribute to
HSA?

what happens to the HSA when you no longer need it? Or when you die?

thanks.

Mark Freeland wrote:
[...]
More than potentially... It doesn't seem to matter if you have the
expenses in 2008 and withdraw the HSA money in 2025, using the 2008
expenses to offset the HSA withdrawal.

I wouldn't even consider doing that! I think it's best to match the
withdrawal to the right tax year even if you can read ambiguities into the
law allowing late reimbursements. Plus, I expect these issues to get
tightened up in the future, perhaps very soon. Have you followed the HSA
substantiation bill?

It's already creeping in - HSA Bank now requires a different process/form
for reimbursements vs. expenses paid directly by check/debit.