Medical expenses you can pay for with HSA funds

An HSA covers most things your health insurance would cover, plus some it won't. You can use the money for doctor visits, hospital stays, prescription drugs, dental work, vision care, and mental health treatment. You can also pay for medical equipment—crutches, wheelchairs, hearing aids, blood pressure monitors—and for the supplies those devices need, like test strips or batteries.

The rule is straightforward: if it treats, diagnoses, or prevents a medical condition, and a doctor would reasonably prescribe it, the IRS lets you pay for it with HSA money. That includes physical therapy, chiropractic care, acupuncture, and psychiatric care. It includes the copays and deductibles your insurance plan charges. It does not include cosmetic procedures—Botox, teeth whitening, elective nose jobs—unless they are medically necessary, which is rare and requires documentation.

Over-the-counter medications and supplies fall into a narrower category. You can pay for them with HSA money only if you have a prescription from a doctor, even if the item itself does not require one at the pharmacy. Allergy medicine, pain relievers, antacids, and cold medicine all need a prescription slip to be HSA-may be able to access, though the prescription does not have to be filled at a pharmacy—your doctor can write one specifically so you can buy the item over the counter.

Key Takeaways

  • You can use HSA money for any medical service or supply a doctor would reasonably prescribe, including deductibles, copays, dental work, and vision care.
  • Over-the-counter medications and supplies require a doctor's prescription to be HSA-may be able to access, even though you buy them without one at the store.
  • Cosmetic procedures, gym memberships, and general wellness products are not covered unless they treat a diagnosed medical condition.
  • You can pay for family members' medical expenses with your HSA, even if they are not on your health insurance plan.
  • HSA money spent on non-medical expenses before age 65 is taxed as income plus a 20 percent penalty; after 65, it is taxed as income only.

Services and treatments covered by HSA funds

Beyond the basics, HSA money covers a wider range of care than many people realize. You can use it for therapy and counseling, substance abuse treatment, fertility treatments, and surgery. You can pay for home health care, nursing services, and assisted living facilities if they are medically necessary. You can cover the cost of a guide dog or service animal if it is trained to perform tasks for a disability.

Dental and vision care are fully covered. That means cleanings, fillings, root canals, crowns, braces, glasses, contact lenses, and eye exams all come out of your HSA. Hearing aids and hearing tests are covered. So are prosthetics, orthopedic shoes, and corrective devices. If your doctor says you need it to treat or manage a health condition, the HSA usually covers it.

Travel to receive medical care is also may be able to access. If you go to another state or country for a procedure, you can use HSA money for the treatment itself, the travel, and lodging related to that trip. The key is that the primary purpose of the trip must be medical care.

What is not covered, and why

General wellness and prevention products are not covered unless they treat a specific diagnosed condition. A gym membership is not covered, even if your doctor recommends exercise. Vitamins and supplements are not covered. Weight loss programs and diet plans are not covered unless your doctor prescribes them as treatment for obesity or a related condition, and even then the coverage is limited.

Cosmetic procedures fall outside HSA coverage. Hairpieces, cosmetic dentistry like veneers or whitening, and elective plastic surgery are not may be able to access. Sunscreen and skincare products are not covered. Toothpaste and mouthwash are not covered, though dental treatment itself is.

Long-term care insurance premiums are not covered by HSA funds. Neither are life insurance premiums or disability insurance. Health insurance premiums themselves are not covered, with one exception: if you are receiving unemployment benefits, you can use HSA money to pay for health insurance premiums during that period.

Paying for family members with your HSA

You can use your HSA to pay for medical expenses of your spouse and dependents, even if they are not covered by your health insurance plan. You do not need to be on the same insurance policy. If your spouse has their own insurance and incurs a medical expense, you can pay it with your HSA money. The same applies to your children and any other tax dependents.

This is useful when one family member has high medical costs and another has the HSA. The person with the HSA can cover the other person's expenses without that person needing their own account. There is no limit on how much you can spend on family members' care, as long as the expenses themselves are HSA-may be able to access.

The tax penalty for non-medical spending

If you withdraw HSA money for something that is not a may have access to medical expense, you pay income tax on that amount plus a 20 percent penalty. That penalty applies only before age 65. Once you turn 65, you can withdraw money for any reason—the withdrawal is taxed as income, but the 20 percent penalty goes away. At that point, your HSA becomes similar to a traditional IRA in terms of how you can use it.

The IRS does audit HSA spending. If you cannot document that a withdrawal was for a may have access to medical expense, you will owe the tax and penalty retroactively, plus interest. Keep receipts and records of what you paid for. If you are unsure whether an expense qualifies, ask your HSA administrator before you withdraw the money—they can tell you whether it is may be able to access.

How to track and document HSA spending

Your HSA administrator will send you statements showing withdrawals, but they do not verify whether those withdrawals were for may have access to expenses. That is your responsibility. Keep receipts, invoices, and explanation of benefits statements from your insurance company. If you pay out of pocket for a medical service, keep the receipt and the provider's invoice.

Some HSA accounts come with a debit card that you can use at pharmacies and medical providers. When you use the card, the transaction is flagged as medical, but you still need to keep the receipt to prove it was a may have access to expense if the IRS asks. For expenses you pay out of pocket and reimburse yourself from the HSA later, document the date, the provider, the service, and the amount before you withdraw the money.

If you are not sure whether something qualifies, your HSA administrator's website usually has a list of covered and non-covered items. You can also call them with a specific question. It is better to ask before you spend the money than to discover later that you owe a penalty.

Frequently Asked Questions

Can I use my HSA to pay for my spouse's medical expenses if they have their own health insurance?

Yes. You can use your HSA to pay for your spouse's may have access to medical expenses regardless of what insurance they have or whether they have an HSA of their own. The expense must be may be able to access—a doctor visit, prescription, or medical device—but the insurance situation does not matter.

Do I need a prescription to buy over-the-counter pain relievers with HSA money?

Yes, you need a written prescription from a doctor, even though you can buy the medication without one at the pharmacy. Your doctor can write a prescription specifically for HSA purposes. Once you have the prescription, you can use your HSA to reimburse yourself for the purchase.

What happens if I use my HSA for something that is not medical?

Before age 65, you owe income tax on the amount plus a 20 percent penalty. After age 65, you owe income tax only. Keep records of what you spent HSA money on in case the IRS asks you to document it later.

Can I use HSA money to pay for my child's braces?

Yes. Orthodontic care, including braces, is a covered dental expense. You can use your HSA to pay for your child's braces even if your child is not on your health insurance plan.

Is a gym membership covered by my HSA if my doctor recommends it for my health?

No. General fitness and wellness are not covered by HSA, even with a doctor's recommendation. However, if you have a specific medical condition like cardiac rehabilitation or physical therapy prescribed after an injury, those services are covered.