What is the downside of an HSA?

The main downsides are that they can only be used with a qualified high deductible health plans, and the annual contribution limits me be less than your medical expenses. Other than that, there are some record keeping requirements: if you are ever audited, you need to show that you used the funds for qualified medical expenses, which shouldn’t be a problem for anything you pay for with the account debit card. Finally, if you withdraw funds for non-qualified expenses, you’ll lose the tax advantages: you'll have to pay income tax plus a penalty.