User Avatar

By Ryan Kennelly

August 10, 2016

Topics:

  • HSA Plans
BACK TO BLOG

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

August 10, 2016

  • HSA Plans
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

AcupunctureHearing aidsPost-nasal treatments
Alcoholism treatmentLaboratory feesPrenatal care
AmbulanceLasik surgeryPrescriptions
Artificial limbLearning disability fees (prescription)Prosthesis
Artificial teethLife-care feesPSA test
BandagesLodging (for out-patient treatment)Psychiatric care
Birth control pills (prescription)Long-term care (medical expenses)Psychiatrist
Breast reconstructionLong-term care insurancePsychoanalysis
Car special hand controls(for disability)Meals (while receiving treatment)Psychoanalyst
ChiropractorsMedical conferences (for ill spouse/dependent)Psychologist
Christian Science practitionersMedicare deductiblesRadium treatment
COBRA premiumsNursing careSmoking cessation programs
Contact lensesObstetricianSpecial education for children
Cosmetic surgery (from trauma or disease)Operating Room CostsSpinal tests
CrutchesOrgan transplantSplints
Dental treatmentOrthodontureSterilization
DermatologistOrthopedic shoesTelephone & TV for hearing impaired
Diagnostic devicesOrthopedistTransportation expenses for treatment
Disabled dependent careOut-of-pocket expenses (Medicare)Vaccines
Drug addiction treatment (inpatient)Over-the-counter medicine
-No longer eligible as of 2011
Vitamins (if prescribed)
EyeglassesOxygen and equipmentWheelchair
Fertility enhancementPediatricianWeight loss programs
Guide dogPersonal care services (for ill)Wig (hair loss from disease)
Gynecologist DeductiblePodiatristX-rays
Health institute (if prescribed)Post-nasal treatments

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 .

Want to Join Independent
Health Agents?

We’d be happy to have your join our team of independent agents.

JOIN NOW