HSA funds cover medical expenses that your health insurance doesn't pay for

An HSA (Health Savings Account) holds money you set aside before taxes to pay for healthcare costs. You can spend it on anything the IRS classifies as a may have access to medical expense — which is broader than most people think, but narrower than "anything health-related." The key rule: the expense must be for diagnosis, treatment, or prevention of a disease or condition. Cosmetic procedures, vitamins, and gym memberships do not may have access to, even if they improve your health.

The money in your HSA is yours to keep. Unlike a Flexible Spending Account (FSA), unused funds roll over year to year. You can let the account grow and spend from it whenever you need to, even decades later. This makes HSAs useful both for immediate medical bills and for long-term healthcare savings.

Key Takeaways

  • may have access to medical expenses include deductibles, copays, coinsurance, prescription drugs, dental work, vision care, and mental health treatment.
  • You can pay for expenses for yourself, your spouse, and your dependents — even if they are not covered by your health insurance plan.
  • Over-the-counter medications and medical supplies now require a prescription or doctor's note to be HSA-may be able to access, with limited exceptions.
  • Cosmetic procedures, gym memberships, vitamins, and weight-loss programs do not count as may have access to expenses unless they treat a specific medical condition.
  • You can withdraw money tax-free only for may have access to expenses; non-may have access to withdrawals are taxed as income plus a 20 percent penalty.

Medical expenses you can pay with HSA funds

The largest category of HSA-may be able to access expenses is what your insurance does not cover. This includes deductibles (the amount you pay before insurance kicks in), copays (fixed fees per visit), and coinsurance (your percentage of the bill after insurance pays its share). If your plan has a $1,500 deductible and you pay $800 of it out of pocket, that $800 is HSA-may be able to access.

Prescription medications are always covered. Over-the-counter drugs — aspirin, cold medicine, allergy pills, antacids — became HSA-may be able to access again in 2020, but only if you have a prescription or a doctor's written note saying you need them for a specific condition. A note from your doctor saying "patient has seasonal allergies and should use antihistamines" is enough; buying allergy medicine without documentation is not.

Dental and vision care are fully covered. This includes cleanings, fillings, root canals, crowns, braces, glasses, contact lenses, and eye exams. Mental health treatment — therapy, psychiatry, counseling — counts as a may have access to expense. So do medical equipment and supplies: crutches, wheelchairs, hearing aids, blood pressure monitors, glucose meters, and test strips.

Expenses for family members and dependents

You can use your HSA to pay for medical expenses for your spouse and any dependents you claim on your tax return, even if they are not enrolled in your health insurance plan. If your spouse has their own insurance and you have yours, you can still use your HSA to cover their out-of-pocket costs. The same rule applies to children and other tax dependents.

The person receiving the care does not need to be on your HSA plan. You do not need to be the one paying the bill directly. If your daughter's orthodontist sends an invoice to your ex-spouse but you claim her as a dependent, you can use your HSA to reimburse yourself or pay the bill directly.

What does not count as a may have access to expense

Cosmetic procedures are not covered unless they treat a medical condition. Botox for wrinkles is not may be able to access; Botox for chronic migraines prescribed by a neurologist is. Hair transplants for baldness do not count. Reconstructive surgery after an accident or illness does.

Gym memberships, fitness classes, and weight-loss programs are not may be able to access, even if your doctor recommends exercise. However, if your doctor prescribes a specific medically supervised weight-loss program for obesity or diabetes, that program may may have access to — you would need written documentation from the doctor. Vitamins and nutritional supplements are generally not covered unless prescribed by a doctor for a diagnosed deficiency.

Cosmetic dentistry (teeth whitening, veneers for appearance) does not may have access to. Preventive dental care (cleanings, X-rays) does. Cosmetic vision care (tinted contacts for appearance) does not; prescription contacts for vision correction do.

Long-term care and insurance premiums

You can use HSA funds to pay premiums for long-term care insurance, which covers nursing home, assisted living, or in-home care for chronic conditions. The amount you can pay this way is limited by age and is set by the IRS each year; for 2024, the limit ranges from $450 to $3,000 depending on your age. You cannot use HSA funds for regular health insurance premiums while you are employed, but you can use them to pay premiums for health insurance after you retire or if you are receiving unemployment benefits.

Medicare premiums (Part B, Part D, and supplemental Medigap policies) are HSA-may be able to access once you are enrolled in Medicare. This is one reason HSAs are useful as retirement savings — you can let the money grow while working and then use it to cover Medicare costs in retirement.

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

If you withdraw money from your HSA for something that does not count as a may have access to medical expense, that withdrawal is taxed as ordinary income. You also pay a 20 percent penalty on top of the income tax. If you withdraw $500 for a non-may have access to expense and you are in the 22 percent tax bracket, you owe $110 in taxes plus $100 in penalties — a total of $210 on a $500 withdrawal.

After age 65, the penalty goes away. You can withdraw money for any reason without the 20 percent penalty, though you still owe income tax on non-may have access to withdrawals. This makes HSAs function like a retirement account after 65, similar to a traditional IRA.

Keep receipts for all HSA expenses. The IRS does not require you to submit them when you file taxes, but you must be able to prove that withdrawals were for may have access to expenses if you are audited. Many HSA providers also track expenses and can provide documentation.

How to pay for expenses with your HSA

Most HSA accounts come with a debit card that you can use at pharmacies, doctors' offices, and hospitals. The card is linked to your HSA balance. Some providers also let you submit receipts for reimbursement — you pay out of pocket and then request a refund from your HSA account.

You can also reimburse yourself for past expenses. If you paid $300 for dental work five years ago and kept the receipt, you can withdraw $300 from your HSA today and use it to reimburse yourself. This is a strategy some people use to let their HSA grow: they pay for medical expenses out of pocket and keep the receipts, then reimburse themselves years later when they need cash.

Frequently Asked Questions

Can I use my HSA to pay for my spouse's medical expenses if they don't have an HSA?

Yes. You can use your HSA to pay for any may have access to medical expense for your spouse, regardless of whether they have their own HSA or health insurance. You do not need to be the one receiving the care or the one paying the bill directly.

Are over-the-counter pain relievers and cold medicine HSA-may be able to access?

Only with a prescription or a doctor's written note. Since 2020, over-the-counter drugs require documentation that a doctor recommended them for a specific condition. A general note saying "patient may use over-the-counter pain relievers as needed" is usually sufficient; you do not need a prescription written by a pharmacist.

Can I use HSA money to pay for my gym membership if my doctor says I need to exercise?

No, gym memberships are not covered even with a doctor's recommendation. However, if your doctor prescribes a specific medically supervised weight-loss or cardiac rehabilitation program, that program may be may be able to access. You would need written documentation from the doctor stating the program is medically necessary for treatment of a diagnosed condition.

What if I accidentally use my HSA debit card for something that's not a may have access to expense?

You owe income tax plus a 20 percent penalty on that withdrawal. If you catch the mistake quickly, some HSA providers allow you to reverse the transaction. Otherwise, you must report the non-may have access to withdrawal on your tax return and pay the taxes and penalty owed.

Can I use my HSA to pay for dental implants or braces?

Yes. Dental work — including implants, braces, crowns, fillings, and root canals — is fully covered by HSA funds. Cosmetic dental work (whitening, veneers for appearance only) is not covered, but restorative dental work is.