You can use your HSA for medical expenses only, not groceries or gym memberships

A Health Savings Account is designed to pay for healthcare costs, and the IRS has a specific list of what counts. You can withdraw money tax-free for may have access to medical expenses. If you spend HSA funds on anything else, you pay income tax on that withdrawal plus a 20% penalty — unless you're over 65, in which case you pay income tax only.

The may have access to expenses list is longer than most people think, but it has real boundaries. Cosmetic procedures, over-the-counter vitamins, and most wellness products don't may have access to. Prescription medications do. Dental work does. Mental health treatment does. The difference often comes down to whether the IRS considers something treatment for a medical condition versus general wellness.

If you're unsure whether a specific expense qualifies, you can ask your HSA plan administrator before you spend the money. They can tell you whether that particular item or service is on the approved list for your plan.

Key Takeaways

  • HSA funds pay for medical, dental, vision, and mental health expenses without tax penalty, but not for cosmetics, gym memberships, or general wellness products.
  • Prescription medications, copays, deductibles, and medical equipment all may have access to, but over-the-counter drugs and supplements usually do not unless prescribed by a doctor.
  • Non-may have access to withdrawals cost you income tax plus a 20% penalty, so it's worth confirming with your plan administrator before spending on something you're unsure about.
  • After age 65, you can withdraw HSA money for any reason without the 20% penalty, though you still pay income tax on non-medical withdrawals.

Medical, dental, and vision expenses that may have access to

Copays, coinsurance, and deductibles for any doctor visit count. So do prescription medications, insulin, and inhalers. If your doctor prescribes medical equipment — a blood pressure monitor, a glucose meter, a cane, a wheelchair — that's covered. Hearing aids and the batteries they need are covered. Dental cleanings, fillings, root canals, and orthodontia all may have access to.

Vision expenses include eye exams, glasses, contact lenses, and laser eye surgery. Mental health treatment — therapy sessions, psychiatric visits, medications for depression or anxiety — qualifies. Physical therapy, chiropractic care, and acupuncture count if a doctor orders them. Hospital stays, surgery, and emergency room visits are covered. Prescription birth control is covered; over-the-counter birth control is not.

Some less obvious expenses may have access to too: the cost of a doctor's note for work, travel to a medical appointment, and lodging near a hospital for treatment all count. If you need a service animal for a medical condition, the cost qualifies. Smoking cessation programs and prescription nicotine replacement may have access to.

Over-the-counter products and why most don't may have access to

Over-the-counter pain relievers, cold medicine, allergy medicine, and antacids do not may have access to unless a doctor prescribes them specifically. The rule changed in 2020: you can no longer buy these items with HSA funds just because they're sitting on a pharmacy shelf. If your doctor writes a prescription for ibuprofen or omeprazole, then you can use your HSA. If you buy the same product over the counter without a prescription, you cannot.

Vitamins, supplements, and herbal products don't may have access to, even if they're sold in a health food store or recommended by a nutritionist. The exception is if a doctor prescribes a specific supplement to treat a diagnosed medical condition — this is rare, but it does happen. Sunscreen, lip balm, and other skin care products don't may have access to. Toothpaste and mouthwash don't may have access to. Deodorant doesn't may have access to.

Pregnancy tests and ovulation kits do may have access to. Feminine hygiene products may have access to. First aid supplies like bandages and antiseptic ointment may have access to. The line between a medical supply and a general wellness product is sometimes blurry, so when in doubt, contact your plan administrator.

Cosmetic procedures and wellness expenses you cannot use HSA for

Cosmetic surgery and cosmetic dentistry don't may have access to — this includes teeth whitening, veneers for appearance only, and Botox. However, if cosmetic work is medically necessary (reconstructive surgery after an accident or illness), it may may have access to. Gym memberships and fitness classes don't may have access to, even if your doctor recommends exercise. Weight loss programs and diet plans don't may have access to unless they're part of treatment for a diagnosed medical condition like obesity or diabetes, and even then, the rules are strict.

Massage therapy doesn't may have access to unless a doctor orders it as treatment for a specific condition. Spa services, saunas, and hot tubs don't may have access to. Maternity clothes don't may have access to. Wigs don't may have access to unless they're needed because of hair loss from a medical condition or treatment like chemotherapy.

Long-term care insurance premiums don't may have access to. Life insurance doesn't may have access to. Health insurance premiums generally don't may have access to, with narrow exceptions for COBRA continuation coverage, Medicare premiums (if you're over 65), and long-term care insurance (up to a limit). Employer health insurance premiums don't may have access to.

How to know if something qualifies before you spend

Your HSA plan administrator maintains a list of approved expenses. You can call them or check their website before you make a purchase. Many plans have a searchable database where you can type in a specific item or service. If it's not listed, ask directly — they can tell you whether it qualifies under IRS rules.

Keep receipts and documentation for everything you buy with your HSA. The IRS doesn't require you to submit receipts when you withdraw money, but you need to keep them for your own records in case of an audit. If you're ever questioned, you'll need to show that the expense was medical in nature.

If you're not sure whether to use your HSA or pay out of pocket, consider this: if the expense doesn't clearly may have access to, paying out of pocket protects you from the 20% penalty. The tax savings from a may have access to withdrawal usually aren't worth the risk of a penalty on a borderline expense.

What happens if you use HSA money for non-may have access to expenses

If you withdraw money for something that doesn't may have access to, you owe income tax on that amount at your regular tax rate, plus a 20% penalty. So if you're in the 22% tax bracket and you withdraw $500 for a non-may have access to expense, you owe $110 in income tax plus $100 in penalty — $210 total. That's a significant cost for a mistake.

You report non-may have access to withdrawals on your tax return. Your HSA plan sends you a Form 1099-SA each year showing all your withdrawals. If you took out $5,000 and $500 of it was non-may have access to, you report the full $5,000 as a distribution and then claim the $4,500 as a may have access to medical expense deduction. The remaining $500 gets taxed and penalized.

The penalty doesn't explore after age 65. Once you turn 65, you can withdraw HSA money for any reason without the 20% penalty. You'll still owe income tax on non-medical withdrawals, but the penalty goes away. This is one reason HSAs are sometimes called "retirement accounts" — after 65, they work more like a traditional IRA.

HSA funds for family members and dependents

You can use your HSA to pay for medical expenses of your spouse and dependents, even if they're not covered under your health plan. If your spouse has their own health insurance through their employer, you can still use your HSA to pay for their medical costs. If your adult child is no longer your dependent, you cannot use your HSA for their expenses.

The person receiving the care doesn't have to be on your tax return as a dependent. What matters is whether the IRS would allow you to claim them as a dependent if you chose to. This is a technical distinction, but it means you have more flexibility than the word "dependent" might suggest. If you're unsure whether a family member qualifies, ask your plan administrator.

Frequently Asked Questions

Can I use my HSA to pay for my dog's medical care?

No. HSA funds are for human medical expenses only. Veterinary care, even for a service animal, doesn't may have access to. The exception is if you have a service animal and you're paying for training or equipment related to the animal's role in treating your medical condition — but the animal's medical care itself doesn't may have access to.

What if I buy something I think qualifies and later find out it doesn't?

You can request a reimbursement correction from your plan administrator if you discover the expense doesn't may have access to. Some plans allow you to reverse the withdrawal. If you can't reverse it, you'll owe the tax and penalty when you file your return. This is another reason to confirm before spending.

Can I use my HSA for therapy or counseling?

Yes. Mental health treatment, including therapy, counseling, and psychiatric care, qualifies. Medications for mental health conditions also may have access to. The treatment must be for a diagnosed condition, not general life coaching or wellness counseling.

Do I have to spend my HSA money every year or do I lose it?

HSA money rolls over year to year — there's no "use it or lose it" rule like some flexible spending accounts have. You can let the balance grow and spend it whenever you need to. This is one advantage of an HSA over other healthcare savings options.

Can I use my HSA for preventive care like annual checkups?

Yes. Preventive care visits, screenings, and vaccinations all may have access to. You can use your HSA to pay the copay for an annual physical or a colonoscopy. Preventive care is one of the clearest may have access to expenses.