What are Qualified Medical Expenses I Can Pay for With My HSA Account?

Funds you withdraw from your HSA are tax-free when used to pay for qualified medical expenses as described in Section 213(d) of the Internal Revenue Service Tax Code. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness, including dental and vision.

Any funds you withdraw for non-qualified medical expenses will be taxed at your income tax rate plus 20% tax penalty if you’re under 65.

The following list provides examples of eligible and ineligible medical expenses. This list is not all-inclusive. Remember, the IRS may modify its list of eligible expenses from time to time. As always, consult your tax advisor should you require specific tax advice.

HSA Qualified Expenses

Insurance Premiums That Qualify as HSA Expense

Most insurance premiums do not qualify as a health-savings-account expense, but there are a few including:

• Qualified long-term care insurance
• COBRA or State Continuation health care continuation coverage
• Health care coverage while an individual is receiving unemployment compensation
• For individuals over age 65 — premiums for Medicare A or B, Medicare HMO, and the employee share of premium for employer-sponsored health insurance

Expenses NOT Eligible for under an HSA

The following are expenses that are often mistaken as qualified HSA expenses, but are NOT eligible:

• Health insurance premiums other than those listed above, including Medicare Supplement, Medicare Part D Rx Plans, and Medigap policies
• Life insurance or income protective policies
• The hospital insurance benefits tax, withheld from you pay as part of the Social Security tax or paid as part of Social Security self-employment tax
• Nursing care for a healthy baby
• Travel your doctor told you to take for rest or change
• Cosmetic surgery (unless a wig related to hair loss from disease)
• Teeth Bleaching

For further information, refer to IRS publication 502 .