Hello Diana, There are a couple of ways to draw money out of a 401k plan.
If you are over 59 and 1/2 you have access to your 401(k) penalty free but you will have to pay income tax on the amount distributed.
If you are under 59 1/2 there are typically three ways to access the capital in your plan if permitted.
Loans: If your 401(k) sponsor offers the ability to borrow against your 401(k) there are a few rules you need to know about. The amount of the loan may not exceed the lesser of $50,000 or one-half of the present value of the participants vested benefit. Loan amounts up to $10,000 may be borrowed without regard to the 50% restriction as long as the account values can support the loan. These loans must charge a reasonable rate of interest and must be repaid within a five year period except for loans used to purchase a personal residence. Loans are not subject to income tax or the 10% penalty for premature distributions if they follow the rules.
In Service Distributions For Any Cause: If your plan sponsor allows this, participants may take a distribution for any reason. Regulations permit distributions from a plan after a fixed number of years which has been interpreted by the IRS as no less than two years. After three three years a plan could then allow a participant to withdraw the first year's contribution and any return earned on that contribution. This would all be subject to a 10% early withdrawal penalty and income taxes if you are under age 59 1/2.
Hardship Withdrawals: Many plans offer hardship withdrawals but are not required to. Hardship Withdrawals are subject to income taxes and are subject to the 10% early withdrawal penalty if under age 59 1/2 with few exceptions. Generally the amount of the Hardship Withdrawal cannot exceed the employee's total elective contributions as of the date of distribution, reduced by the amount of any previous distributions on account of hardship. The participant must be able to prove immediate and heavy financial need. There is an extensive list of reasons that qualify but in your case payment of medical fees is one of the qualifying reasons. You will not be able to exceed the amount needed to relieve the heavy burden and all other sources of funds that are reasonably available to the participant will need to be used prior to allow for this type of withdrawal.
Your employer should have all of the relevant contact information in order for you to start exploring your options.
I hope this helps.