What If I Don’t Have Money In My HSA?

If you are able, Tango Health strongly advises you to put money in your HSA through payroll deductions. This is the only way to receive the full tax benefit. If you use a method other than payroll deductions to fund your HSA (for example, sending a check to the bank or making an electronic deposit from your checking or savings account) you will not receive payroll tax relief. You will still be able to receive income tax relief but using payroll deductions is the only way to save your payroll taxes. Saving payroll taxes can be hundreds of dollars in savings.

To see these advantages, it is not necessary to fund your HSA before you pay for medical expenses. In fact, using Tango makes it easy for people who are cashflow constrained to leave their HSA balance at $0. These users only contribute to their HSA after they have a medical expense. They will pay the medical expense with money that was already taxed (from the checking account or credit card). Afterwards, when they have money in their HSA, they will pay that untaxed money back to their checking account, effectively paying for the expense with untaxed money.

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