Medical expenses you can pay for with HSA funds
Your HSA can pay for most things a doctor prescribes or a medical professional bills you for. This includes doctor visits, hospital stays, surgery, dental work, vision care, mental health treatment, and prescription medications. You can also use HSA money for medical equipment—wheelchairs, crutches, hearing aids, glucose monitors—and for supplies like bandages, syringes, and over-the-counter medications that treat a specific medical condition.
The key rule is that the expense must be for diagnosis, treatment, or prevention of a medical condition. A vitamin you take because you think it might help is not covered. A vitamin your doctor prescribes to treat a documented deficiency is covered. If you are unsure whether something qualifies, the IRS publishes a list of approved medical expenses, and your HSA provider can also tell you whether a specific item is allowed before you spend the money.
Key Takeaways
- HSA funds cover doctor visits, hospital care, prescription drugs, dental work, vision care, and medical equipment—anything a licensed provider bills you for as treatment or diagnosis.
- Over-the-counter medications and supplies are covered only if they treat a specific medical condition, not for general wellness.
- Expenses must be for you, your spouse, or your dependents—you cannot use HSA money to pay for someone else's medical care.
- You can use HSA funds to pay insurance premiums in limited situations: COBRA continuation coverage, long-term care insurance, and health insurance while you are unemployed.
- Cosmetic procedures, gym memberships, and general wellness products are not covered, even if they improve your health.
Over-the-counter items you can and cannot buy
The rules for over-the-counter products changed in 2020. Before that year, you could not use HSA money for over-the-counter medications without a prescription. Now you can—but only if the product treats a specific medical condition and you have a receipt showing what you bought.
This means you can use your HSA to pay for over-the-counter pain relievers, allergy medications, antacids, cold medicines, and anti-diarrheal products. You can also buy bandages, elastic wraps, heating pads, ice packs, and other medical supplies. What you cannot do is use HSA money for vitamins, supplements, or general wellness products unless a doctor has prescribed them to treat a diagnosed deficiency or condition. Sunscreen, toothpaste, and shampoo are not covered, even if they prevent problems. A humidifier for dry air is not covered. A humidifier prescribed by a doctor to treat sleep apnea is covered.
Keep your receipts. If you use your HSA debit card to buy something and the IRS later questions whether it was a may have access to expense, you need proof of what you actually purchased.
Insurance premiums you can pay with HSA money
You cannot use your HSA to pay your regular health insurance premium—the one for the high-deductible health plan that qualifies you for the HSA in the first place. But there are three situations where you can use HSA funds to pay insurance:
- COBRA continuation coverage. If you leave a job and elect COBRA to keep your employer health plan temporarily, you can use HSA money to pay the COBRA premium.
- Long-term care insurance. You can use HSA funds to pay premiums for a policy that covers nursing home care, assisted living, or in-home care in your later years. There are age-based limits on how much you can pay this way, and the rules vary by your age.
- Health insurance while unemployed. If you are receiving unemployment benefits, you can use HSA money to pay for any health insurance premium—marketplace plans, spouse's employer plan, or individual policies.
You cannot use HSA money to pay for supplemental insurance, accident insurance, or vision and dental plans sold separately from your main health coverage.
What disqualifies an expense
Cosmetic procedures are not covered unless they are medically necessary. Botox for wrinkles is not covered. Botox for chronic migraines prescribed by a neurologist is covered. Teeth whitening is not covered. Braces to correct a bite problem are covered. Hair transplants for baldness are not covered. Hair transplants after chemotherapy or to repair a burn scar are covered.
General wellness is not covered. Gym memberships, fitness classes, diet programs, and weight-loss supplements are not covered, even if your doctor recommends exercise or weight loss. Therapy to improve your mood or manage stress is covered if a mental health professional provides it. A meditation app or self-help book is not covered. Fertility treatment and contraception are covered. Abortion is covered. Maternity care is covered.
You also cannot use HSA money to pay for someone else's medical care unless they are your spouse or a dependent you claim on your tax return. You cannot use it to pay for a friend's medical bill or to reimburse a family member for their health expenses.
How to actually spend your HSA money
Most HSA providers give you a debit card you can use at pharmacies, doctor offices, and hospitals just like a regular payment card. The card is linked to your HSA balance, and the transaction is deducted from your account. This is the simplest way to pay for covered expenses.
You can also pay out of pocket and then request reimbursement from your HSA provider. You submit a receipt and a form, and the provider sends you a check or deposits money into your bank account. This method takes longer—usually one to two weeks—but it lets you keep the money in your HSA longer and earning interest or investment returns if your plan allows it.
Some HSA providers also let you set up automatic payments to recurring medical bills, like monthly therapy sessions or ongoing prescriptions. Check with your provider about what payment methods they support.
What happens if you spend HSA money on something not covered
If you use your HSA debit card to buy something that is not a may have access to medical expense, you are responsible for paying income tax on that amount plus a 20 percent penalty. The penalty applies only to non-may have access to expenses, not to your entire HSA balance. If you spend $100 on a non-may have access to item and your tax bracket is 22 percent, you owe $22 in income tax plus $20 in penalty, for a total of $42.
The IRS does not automatically know what you bought with your HSA card. But if you cannot produce a receipt showing a may have access to expense, and the IRS audits you, you will owe the tax and penalty retroactively. This is why keeping receipts matters, especially for over-the-counter items and medical equipment.
After age 65, the penalty goes away—you still owe income tax on non-may have access to expenses, but not the 20 percent penalty. This is one reason some people use HSAs as a retirement savings tool.
Frequently Asked Questions
Can I use my HSA to pay for my spouse's medical bills?
Yes, if your spouse is covered under your health plan or if you file taxes jointly. You cannot use HSA money to pay for a spouse's medical expenses if you file taxes separately. Dependents you claim on your tax return are also covered.
Is prescription eyeglasses covered?
Yes. Eyeglasses, contact lenses, eye exams, and laser vision correction are all covered. Over-the-counter reading glasses are also covered because they are medical devices that correct vision.
Can I use my HSA to pay for therapy or counseling?
Yes, if a licensed mental health professional provides it—a therapist, psychologist, psychiatrist, or counselor. The treatment must be for a diagnosed mental health condition. Self-help books and meditation apps are not covered.
What if my doctor prescribes something but my insurance does not cover it?
You can use your HSA to pay for it. The HSA rules are separate from your health plan's coverage rules. If your doctor prescribes a medication and your insurance denies it, you can still use HSA money to pay for the prescription out of pocket.
Can I use my HSA to pay for my pet's medical care?
No. HSA funds can only be used for medical care for you, your spouse, or your dependents. Veterinary expenses are not covered under any circumstances.