may have access to HSA expenses are medical, dental, and vision costs that the IRS allows you to pay with HSA funds without owing income tax on the withdrawal

The IRS publishes a specific list of what counts. The main categories are doctor visits, hospital care, prescription drugs, dental work, vision care, and medical equipment like wheelchairs or hearing aids. You can also use HSA money for mental health treatment, physical therapy, and certain over-the-counter medications — but not all of them. The rules are strict: if you spend HSA money on something not on the IRS list, you owe income tax on that amount plus a 20 percent penalty.

What makes this matter is that HSA money is triple-tax-advantaged: you don't pay income tax when you put money in, you don't pay tax on the growth, and you don't pay tax when you withdraw it for a may have access to expense. That tax benefit only applies to the approved list. Spending on anything else costs you significantly more than paying out of pocket would.

Key Takeaways

  • Doctor visits, hospital stays, prescription drugs, dental work, and vision care are always may have access to expenses.
  • Many over-the-counter medications and medical supplies are may have access to, but not all — insulin is, antihistamines are not.
  • Health insurance premiums, cosmetic procedures, and gym memberships are never may have access to, even if they improve your health.
  • If you spend HSA money on a non-may have access to expense, you owe income tax plus a 20 percent penalty on that amount.
  • The IRS publishes the full list in Publication 502, and you can also search the HSA-may be able to access products database on the IRS website.

Medical care that is always may have access to

Any visit to a doctor, dentist, optometrist, or mental health professional counts. Hospital stays, emergency room visits, surgery, and diagnostic tests like X-rays and blood work are all may have access to. You can use HSA funds to pay the doctor's bill, the facility fee, and any anesthesia or lab work that goes with it.

Prescription drugs are may have access to as long as they were prescribed by a doctor. Over-the-counter drugs are may have access to only if you have a prescription for them — you cannot just buy ibuprofen or allergy medicine off the shelf and pay with HSA funds, even though you could buy them with a prescription. Insulin is the one major exception: you can buy insulin over the counter without a prescription and still use HSA money.

Medical equipment and supplies are may have access to if they treat or monitor a specific condition. A wheelchair, crutches, hearing aid, blood glucose monitor, or blood pressure cuff all count. Eyeglasses and contact lenses are may have access to. Dental work — fillings, crowns, root canals, orthodontia — is may have access to. Hearing aid batteries and repairs are may have access to.

Over-the-counter items with restrictions

The rules for over-the-counter products changed in 2020. Before that year, you could buy almost any health-related item. Now the IRS distinguishes between drugs and medical supplies. A drug — whether prescription or over-the-counter — is only may have access to if you have a prescription. A medical supply or device is may have access to even without a prescription, as long as it treats or monitors a medical condition.

This means you can use HSA funds to buy a heating pad, ice pack, bandages, elastic bandages, first aid kits, thermometers, pulse oximeters, and pain relief patches. You cannot use HSA funds to buy pain relievers, cold medicine, allergy medicine, antacids, or anti-diarrheal medicine unless you have a prescription for them. The distinction is whether the IRS classifies it as a drug or a device.

Some items sit in a gray area. Sunscreen is not may have access to. Vitamins and supplements are not may have access to unless they treat a specific diagnosed deficiency. Pregnancy tests are may have access to. Feminine hygiene products are may have access to as of 2020. If you are unsure about a specific item, the IRS maintains a searchable database on its website where you can look up individual products.

What is never may have access to, even if it helps your health

Health insurance premiums are not may have access to HSA expenses — with one exception. You can use HSA funds to pay premiums for long-term care insurance, but not for regular health, dental, or vision insurance. You also cannot use HSA funds to pay for COBRA continuation coverage or premiums while you are receiving unemployment benefits.

Cosmetic procedures are never may have access to, even if they improve your appearance and confidence. Teeth whitening, hair removal, wrinkle treatments, and elective surgery do not count. Gym memberships and fitness classes are not may have access to, even though exercise is good for your health. Weight loss programs and diet plans are not may have access to unless they treat a specific diagnosed condition like obesity-related diabetes.

Childcare, nursing care for a healthy person, and general wellness services are not may have access to. Acupuncture is may have access to only if it treats a specific condition and is recommended by a doctor. Chiropractic care is may have access to. Therapy for substance abuse is may have access to, but therapy for general stress or life coaching is not.

Dental and vision expenses

All dental work is may have access to: cleanings, fillings, root canals, crowns, bridges, extractions, and orthodontia. Dental implants are may have access to. Dentures and retainers are may have access to. Teeth whitening is not may have access to because it is cosmetic. Mouthwash and toothpaste are not may have access to because they are not prescribed.

All vision expenses are may have access to: eye exams, glasses, contact lenses, and contact lens solution. LASIK and other corrective surgery is may have access to. Sunglasses are not may have access to, even if they have a prescription, because they are considered cosmetic. Magnifying glasses for reading are not may have access to unless they are prescribed to treat a specific vision condition.

Mental health and therapy

Visits to a psychiatrist, psychologist, or licensed therapist are may have access to if they treat a diagnosed mental health condition. Therapy for depression, anxiety, PTSD, eating disorders, and substance abuse is may have access to. Inpatient mental health treatment and residential rehabilitation programs are may have access to.

Therapy for general life stress, relationship counseling that is not medically necessary, and life coaching are not may have access to. The distinction is whether a doctor has diagnosed a condition that the therapy treats. If you are unsure whether your specific situation qualifies, ask your therapist or your HSA plan administrator.

What happens if you spend HSA money on a non-may have access to expense

If you withdraw HSA funds for a non-may have access to expense, you owe income tax on that amount at your regular tax rate, plus a 20 percent penalty. If you are in the 24 percent tax bracket and withdraw $1,000 for a non-may have access to expense, you owe $240 in income tax plus $200 in penalty — $440 total. You report this on your tax return when you file.

The penalty does not apply if you are over 65, disabled, or no longer covered by a high-deductible health plan. In those cases you owe only the income tax. If you made a mistake and spent HSA money on something you later realized was not may have access to, you cannot undo it — you will owe the tax and penalty when you file your return.

Keep receipts for all HSA withdrawals. If the IRS audits your HSA account, you will need to show that your expenses were may have access to. The burden is on you to prove it, not on the IRS to prove they were not.

How to learn about a specific expense is may have access to

The IRS publishes Publication 502, which lists may have access to medical expenses in detail. You can download it free from the IRS website. The publication covers hundreds of specific situations and is the official source.

The IRS also maintains a searchable database where you can look up specific products and services. Search for the item by name, and the database will tell you whether it is may have access to. This is faster than reading the full publication if you have a single question.

Your HSA plan administrator can also answer questions about whether a specific expense is may have access to. Call the customer service number on your HSA card or log into your account online. They have access to the same IRS rules and can give you a definitive answer before you spend the money.

Frequently Asked Questions

Can I use HSA money to pay for my spouse's or child's medical expenses?

Yes. You can use your HSA to pay for may have access to medical expenses for yourself, your spouse, and any dependent you claim on your tax return — even if they are not covered by your health insurance plan. The person receiving the care does not have to be on your HSA account.

Is prescription eyeglasses a may have access to expense?

Yes. Eyeglasses, contact lenses, contact lens solution, and eye exams are all may have access to. Sunglasses are not may have access to, even if they have a prescription, because they are considered cosmetic.

Can I use HSA money to buy over-the-counter pain relievers?

Not without a prescription. As of 2020, over-the-counter drugs are only may have access to if a doctor prescribes them. You can buy them with a prescription and use HSA funds, but you cannot buy them off the shelf. Insulin is the one exception — you can buy insulin over the counter without a prescription and use HSA money.

What if I use my HSA card to pay for something and later find out it was not may have access to?

You owe income tax on that amount plus a 20 percent penalty when you file your tax return. The penalty does not apply if you are over 65, disabled, or no longer covered by a high-deductible health plan. Keep all receipts so you can document what you spent the money on if the IRS asks.

Are vitamins and supplements may have access to expenses?

Not unless they treat a specific diagnosed deficiency. A multivitamin is not may have access to. A vitamin D supplement prescribed by your doctor to treat vitamin D deficiency is may have access to. Ask your doctor whether your supplement treats a diagnosed condition before you use HSA funds.