Suppose I pay $200 to cover a medical expense. Also suppose that my insurance would only cover $10 of this and so I don’t even bother submitting a claim. Would I be eligible later to withdraw the full $200 tax-free from an HSA? Or would I only get $190 tax-free since I could have could have been reimbursed by my insurance for the rest of the amount?
For your HSA, a qualified medical expense is any money that you spent out of pocket on medical care that was not reimbursed by something else. If you paid $200 on an eligible medical item or service and did not get reimbursed by anything else, then you can take an HSA distribution and get reimbursed by the HSA for the entire amount. It doesn’t matter what insurance might have covered had you done something different; if insurance didn’t pay and you did, then you can use HSA money.
However, if you do take the entire $200 from your HSA and then later receive $10 from your insurance, you need to send that $10 to your HSA by making a Mistaken Distribution Repayment.