In the US I get medical benefit insurance. Every time, some amount of money is subtracted from my paycheck as a medical insurance premium cost. Besides that I contribute some amount of money to HSA (health savings account) which is a part of medical insurance benefit. When I go to doctor, insurance doesn't cover 100% medical costs so I have to pay some expense out of pocket. Because medical insurance doesn't cover 100% of my medical expenses I need to have that HSA account to pay the uncovered part. Here is the problem: I have recently seen that my HSA account balance started adding interest about 0.03$. As my balance grows, that interest will start growing. So my HSA account balance keeps growing with interest. Is that interest haram (forbidden)? Again, I put money into HSA account to cover my medical expense as part of tax requirement and they start to grow with interest and with my contributions. Is that interest haram?
Any amount of money received in addition to your capital is interest, and it is haraam. The only exception is the rate of inflation:
Before the fiduciary monetary system (paper money system), money was made of gold or silver, which are precious metals. Therefore, any amount of increase added on the principal was obviously interest. However, purchasing power is the criterion in the current paper money system. In order to comply with the expression “neither you do wrong, nor you are wronged (al-Baqarah 2:279)”, the purchasing power of the loaned/owed money must be fixed. The loss of purchasing power may be calculated by considering the inflation rate. Any other addition to your capital is interest.
If there is a way to turn that HSA into a type of account that does not grow, maybe by applying to the officials personally, you can do that.
If that is of no use and you have to use that account for your health expenses, you should be keeping track of the interest, and giving away that amount of money to the needy without expecting any return from God. The money you give would be considered as interest for your use but as a gift for the person who receives it. So it is not forbidden for their use. You would better not tell the person that it was interest, which could hurt him/her.
Furthermore, there is no difference between the money being spent out of your HSA account or any other account. The physical money itself is not forbidden, but consuming interest is. It is okay as long as the amount of money which was gained through interest is given away out of your possession.
