When you think about using a Health Savings Account, or HSA, doctor visits and prescriptions may be the first expenses that come to mind. But HSA funds may cover a much wider range of qualified medical expenses, including certain dental services, vision care, over-the-counter medications and everyday medical supplies.
The important part is understanding why an expense qualifies. In general, eligible medical expenses must be primarily for the diagnosis, cure, mitigation, treatment or prevention of a disease, or for treatment affecting a structure or function of the body. Purchases that are simply beneficial to your general health usually do not qualify.
Here are several types of expenses you may not realize are HSA-eligible.
Dental and Vision Expenses You May Be Overlooking
Your HSA may help with more than medical appointments. A variety of qualifying dental and vision expenses may also be paid or reimbursed with HSA funds.
Dental treatment
Eligible dental expenses may include:
- Dental exams and cleanings
- Fillings
- X-rays
- Extractions
- Dentures or artificial teeth
- Treatment for dental disease
- Certain orthodontic treatment
The IRS considers dental expenses part of medical expenses. A dental exam qualifies because it can help determine whether a disease or illness is present.
Cosmetic procedures generally do not qualify if performed solely to improve appearance. If a treatment has both medical and cosmetic purposes, verify its eligibility and documentation requirements before using your HSA.
Eye exams, glasses and contacts
Many common vision expenses may qualify, including:
- Eye exams
- Prescription eyeglasses
- Contact lenses
- Contact lens supplies
- Certain corrective eye procedures
In their KWLM Ask the Expert discussion, Mandy Fleming and Alina Carlson identified eye exams, glasses and contacts as examples of expenses an HSA may cover. Current IRS guidance also includes eye exams, prescription eyeglasses and contact lenses among medical expenses.
Ordinary non-prescription sunglasses and eyewear purchased only for fashion or general use should not be treated as eligible medical expenses.
Over-the-Counter Medications and Everyday Medical Supplies
Some of the most surprising HSA-eligible expenses may already be in your medicine cabinet.
Over-the-counter medications
HSA funds may be used for many over-the-counter medications, including products used for pain relief, allergies, colds, and other medical needs.
Examples may include:
- Pain relievers
- Allergy medicine
- Cold and flu medicine
- Antacids
- Cough medicine
- Certain medicated treatments
Eligibility depends on what the product is and how it is used. Check the product information and current IRS guidance if you are unsure.
Medical supplies and diagnostic devices
Everyday supplies purchased for medical care may also qualify. Examples can include:
- Bandages
- Blood sugar testing supplies
- Diagnostic devices
- Crutches
- Wheelchairs
- Certain condition-specific medical supplies
During the KWLM Ask the Expert conversation, bandages were mentioned as an example that people may not initially think about when using an HSA. IRS medical-expense resources also identify bandages, diagnostic devices, crutches, and wheelchairs as medical expense categories.
However, an item does not qualify simply because it is sold in a pharmacy or health section. Ordinary personal-care products are generally different from supplies purchased primarily for medical care.
Reproductive, Menstrual and Family Health Expenses
HSA funds may be available for several reproductive and family health expenses.
Menstrual care and reproductive health products
Menstrual care products may qualify for HSA payment or reimbursement. Depending on the item and current IRS rules, eligible reproductive health expenses may also include certain birth control products, condoms, fertility-related care, and breast pumps or lactation supplies.
Some reproductive or fertility expenses have specific eligibility requirements. Review the current rules or speak with your HSA custodian before paying for an unfamiliar item or service with HSA funds.
Expenses for a spouse or tax dependent
Your HSA is not necessarily limited to your own qualified medical expenses. You may also be able to use the account for qualified expenses incurred by your spouse or tax dependents.
In the KWLM Ask the Expert discussion, Alina Carlson explained that HSA funds may be used for qualified expenses of the account holder, spouse, or tax-dependent, even when that person is not covered by the account holder’s HSA-eligible health plan.
Tax-dependent rules can be complicated, so verify that the person and expense qualify before requesting reimbursement.
Mental Health, Mobility and Specialized Care
Qualified medical expenses are not limited to physical illnesses or routine appointments.
Mental health treatment
Certain mental health services may qualify when they are provided for the diagnosis or treatment of a mental illness. These may include eligible services from psychiatrists, psychologists, and other qualified medical practitioners.
General activities intended only to improve mood, reduce stress or support overall wellness do not automatically qualify. The purpose of the expense and the type of care provided matter.
Medical equipment and accessibility items
Certain equipment and accessibility expenses may qualify when they are primarily used for medical care or to accommodate a disability. Examples may include:
- Hearing aids
- Crutches
- Wheelchairs
- Artificial limbs
- Certain diagnostic devices
- Guide dogs or other qualifying service animals
- Certain home modifications made for medical reasons
The eligibility of some equipment and home changes depends on the individual’s medical circumstances. Supporting documentation may be needed to show that the expense was primarily for medical care rather than personal convenience.
Travel and Transportation for Medical Care
Some costs of getting to and from medical care may qualify as medical expenses. Eligible costs may include certain transportation expenses that are primarily for and essential to medical care. In limited circumstances, lodging connected to medical treatment may also qualify.
Transportation and lodging have specific requirements and limitations. Before requesting reimbursement, document:
- The date of the trip
- The medical reason for the travel
- The destination
- The expenses paid
- The person receiving care
- Any supporting provider or appointment information
Not every travel expense connected to a medical appointment will qualify. Meals, personal sightseeing, and other non-medical portions of a trip should not be treated as eligible simply because medical care occurred during the same trip.
Expenses That May Qualify Only in Certain Situations
Some items may be eligible only when used to treat a diagnosed condition or recommended as part of medical care.
Examples may include:
- A weight-loss program used to treat a diagnosed disease
- Certain nutrition or wellness expenses prescribed for a specific medical condition
- Special equipment purchased because of a disability
- Home modifications made primarily for medical care
- Certain lodging related to medical treatment
- Condition-specific programs or supplies
The IRS explains that medical expenses must be primarily used to alleviate or prevent a physical or mental disability or illness. An item that is merely beneficial to general health usually does not meet that standard. A provider’s recommendation alone may not make every expense eligible. Ask what documentation is required and verify the current rules before using HSA funds.
Common Purchases That Usually Are Not HSA Eligible
Not everything related to health, hygiene, or wellness qualifies. Common examples that generally should not be treated as eligible without a specific supported medical exception include:
- Ordinary toothbrushes and toothpaste
- General vitamins or supplements
- Gym or fitness club memberships
- Everyday toiletries
- Cosmetic products
- Non-prescription eyewear purchased for fashion
- Vacations taken for general health or relaxation
- Food or diet products purchased for general wellness
- Cosmetic procedures performed only to improve appearance
Gym memberships, nutritional products, and weight-loss programs may qualify only in limited medical situations. General wellness or personal use alone is not enough.
Keep Receipts and Verify Before You Spend
Using an HSA debit card does not automatically qualify a purchase as a medical expense. It is the account holder’s responsibility to keep records and verify eligibility.
Save documents such as:
- Itemized receipts
- Explanations of benefits
- Medical bills
- Proof of payment
- Provider recommendations or medical-necessity documentation, when applicable
- Proof that the expense was not reimbursed elsewhere
If your HSA balance is too low when an eligible expense occurs, you may be able to pay another way and reimburse yourself later. The expense must have occurred after the HSA was established, and adequate records must be retained. Confirm the applicable requirements before requesting reimbursement.
Frequently Asked Questions About HSA Eligible Expenses
Many over-the-counter medications may be paid for or reimbursed with HSA funds. Eligibility depends on the product and its medical use, so check current IRS guidance when you are unsure.
Many dental and vision expenses may qualify, including dental exams, certain dental treatments, eye exams, prescription glasses and contact lenses. Cosmetic services and items purchased only for appearance generally do not qualify.
HSA funds may be used for the qualified medical expenses of the account holder, spouse, or qualifying tax dependent. Confirm that both the person and expense meet the applicable IRS requirements.
Keep itemized receipts, explanations of benefits, proof of payment, and records showing that the expense was not reimbursed elsewhere. Conditional expenses may require additional medical documentation.
You may be able to reimburse yourself later for a qualified medical expense incurred after the HSA was established. Keep detailed records and confirm the applicable requirements before taking the reimbursement.
An ineligible distribution may be included in taxable income and may be subject to an additional tax. If you believe you used the account for an ineligible expense by mistake, contact your HSA custodian about its correction process and consult a qualified tax professional for individual guidance.
Hear More About Health Savings Accounts
Want to learn more about HSAs? Listen to Mandy Fleming and Alina Carlson discuss qualified expenses, account ownership, contributions and recordkeeping during Heritage Bank’s KWLM Ask the Expert conversation. Also check out this post for Everything You Need To Know About HSAs.
Make More of Your HSA
Your HSA can help pay for more than doctor visits and prescriptions. Dental care, prescription vision expenses, over-the-counter medications, certain medical supplies and qualified expenses for family members may also be eligible.
Before using HSA funds, consider why the item or service is being purchased, verify whether any conditions apply, and save the documentation supporting the expense.
Heritage Bank offers Health Savings Accounts for eligible individuals. Explore our HSA account options or contact Heritage Bank NA with questions about opening an account.
Source irs.gov
The information contained in this article is provided for general informational and educational purposes only. It is not intended to constitute, and should not be relied upon as, financial, investment, tax, legal, or accounting advice. Heritage Bank, N.A. recommends consulting qualified professionals regarding your specific circumstances before making financial, investment, tax, or legal decisions.
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