Eligible HSA Expenses: Find out what’s included

Qualified HSA expenses are items that you are allowed to claim to withdraw your health savings account funds tax-free.

Health care expenses can have a serious negative impact on your finances, especially when the costs are unexpected.

Fortunately, a Health Savings Account (HSA) allows you to plan ahead and set aside money for future medical expenses, using pre-tax dollars.

But how do you know which medical expenses are eligible for reimbursement under HSA rules? This article covers a list of common eligible expenses, some of which are not. We also explain how an HSA works, and answer some frequently asked questions.

What is an HSA account?

A Health Savings Account is a tax-sheltered savings account that enables you to save for future health care expenses. You can withdraw money tax-free from your HSA to cover qualified medical bills, deductibles, copayments, and other expenses not covered by your health insurance plan. But always check before making withdrawals, as nonqualified distributions are subject to income tax (more on that later).

Who can contribute to an HSA plan?

Not everyone is eligible to contribute to an HSA. To qualify, you must meet the following requirements:

• You must have a high deductible health plan (HDHP)*
• You cannot have other health coverage (this is usually a requirement of an HDHP)
• You cannot enroll in Medicare
• You cannot be listed as a dependent on someone else’s tax return

*HDHPs have a higher deductible than traditional insurance plans, so the plan holder is responsible for more out-of-pocket expenses before insurance kicks in. 

Shared HSA eligible expenses

When you withdraw from a health savings account to pay for qualified medical expenses, you can reduce your health care costs while enjoying some tax benefits. Below is a list of some common HSA-eligible medical expenses. For a more complete list, see IRS Publication 502.

Medical services

• Acupuncture: You can include money spent on acupuncture treatments.
• Ambulance services: You can include the amount spent on ambulance services.
• Chiropractic services: Chiropractic treatments, such as spinal adjustments and therapeutic massage, may be included.
• Dental services: Routine and specialized dental care is included, including cleanings, fillings, crowns, and orthodontics.
• Doctors fees: Fees paid for primary care visits, specialty visits, and surgeon fees.
• Hospital services: Includes expenses related to surgery, x-rays, laboratory tests, and emergency room visits.
• Long-term care services: It should be ordered by a person with a chronic illness and prescribed by a licensed health care professional.
• Mental health services: It included counseling and therapy, substance abuse treatment, and psychological counseling.
• Vision care: Includes eye exams, glasses and contact lenses.

Prescription and over-the-counter medications

• Birth control pills: You can claim the amount you pay for pills that your doctor signed up for.
• Prescribed medications: Medications prescribed by a health care provider, such as antibiotics, insulin, and blood pressure medications.

Medical supplies and equipment

• Diagnostic devices: You can include equipment used to diagnose various medical conditions, such as glucometers and blood pressure monitors.
• Durable medical equipment: Includes wheelchairs, walkers and CPAP machines.
• First aid supplies: You can include basic first aid supplies used at home, including bandages, gauze, antiseptic ointments, and thermometers.
• Hearing aids: Includes hearing aids and hearing aid batteries.
• Insulin supplies: Syringes, syringes and insulin pumps are included.

Preventive care

• Offers: Routine screenings and preventive tests, including mammograms, colonoscopies, and prostate exams, are eligible for an HSA.
• Fortifications: Money spent on vaccinations and booster shots can be refunded under HSA rules. This includes influenza and tetanus vaccines, and the human papillomavirus vaccine.

Medical procedures

• Breast reconstruction surgery:Expenses incurred for breast reconstruction surgery, including breast prostheses after a mastectomy due to cancer, are eligible for an HSA.
• Eye surgery:If you have had corrective eye surgery, including laser surgery or radial keratotomy, you can use HSA funds to cover expenses.
• Operations: Medical costs incurred for legal procedures, which do not include cosmetic surgery, are considered HSA-eligible expenses.
• planting: If you are a donor or potential donor of a kidney or other organ, you can include medical expenses incurred for related medical care.

Travel and accommodation

• communications: Transportation expenses incurred for the purpose of receiving medical care are eligible. Examples include bus, taxi, plane, train or taxi fares and ambulance expenses.
• stay: Accommodation expenses are included when receiving medical care outside the home. This includes the cost of meals and hospital or hotel accommodation during the long medical treatment.
• Home Improvements:Medically necessary home improvements such as elevators, ramps, widened doorways or wheelchair lifts.

Miscellaneous expenses

• Fertility treatments: Surgery or other procedures are included to help with pregnancy, including in vitro fertilization and storage of eggs and sperm.
• Physical therapy: Physical therapy expenses incurred to recover from an injury or surgery are eligible under HSA rules.
• Smoking cessation programsSmoking cessation treatments are included. However, you cannot claim expenses for over-the-counter aids, such as nicotine gum or patches.
• Weight loss programs: The cost of weight-loss programs prescribed by a doctor to treat a diagnosed disease, such as obesity, high blood pressure or heart disease, may be reimbursed under HSA rules.

How do HSA reimbursements work?

Typically, you will be required to pay medical expenses up front until you reach your HDHP plan’s annual deductible. You can then ask your HSA trustee to send you a tax-free distribution from your HSA account.

You can use these distributions to cover qualified medical expenses you incurred after opening your HSA. Keep in mind that nonqualified distributions are subject to income tax, and you may be required to pay an additional 20% tax.

Who are eligible medical expenses?

You can claim medical expenses for yourself, and for someone who was your spouse or dependent at the time they received the medical service, or when you paid for their medical expenses.

What expenses are not included?

While they may be beneficial to your health and wellness, not all medical-related expenses qualify under HSA rules. Here are some expenses that are not included:

• Babysitting/childcare
• Controlled substances (i.e. marijuana)
• Plastic surgery
• Electrolysis/hair removal
• Funeral services
• Insurance premiums
• maternity clothes’
• Over-the-counter medications other than insulin (such as aspirin and Advil)
• Teeth whitening
• Weight loss program (unless diagnosed and treated by a doctor)

For the full list, see IRS Publication 502.

Bottom line

Although our list includes many common expenses, it is not comprehensive. For more details on what is covered under HSA rules, be sure to check out IRS guidelines Or talk to an HSA administrator. After all, you want to make sure your expenses qualify, or they may be subject to income tax when you withdraw HSA funds.

Frequently asked questions

Can I use my HSA for vitamins?

Vitamins purchased without a prescription are not considered eligible medical expenses for HSA purposes. Over-the-counter medications, such as headache, flu, or cold medicine, are also not included.

Can I use my HSA for eyeglasses?

Yes. Vision care-related expenses, including eyeglasses and contact lenses, are eligible.

Can I cover my health insurance premiums through my HSA?

no. Insurance premiums are not considered eligible expenses under HSA rules.

Can I claim expenses incurred before I opened my HSA plan?

no. Medical expenses incurred before opening your HSA account are not considered eligible medical expenses, for HSA purposes.

Is the Apple Watch considered a medical device for HSA purposes?

It is unlikely that you will be able to claim the cost of the Apple Watch. According to HSA StoreA fitness tracker, such as a FitBit, must have a letter of medical necessity from a doctor in order to qualify as an HSA-eligible medical expense. You can check with your doctor, but you’ll likely need a specific medical reason to use a fitness tracker. Even if your doctor completes the LMN form, there is no guarantee that it will be accepted.