What an HSA covers: the basic rule

You can spend HSA money on medical expenses that the IRS considers may have access to. The IRS publishes a list, and it is narrower than "anything health-related." You can use HSA funds for doctor visits, prescriptions, dental work, and vision care. You cannot use them for gym memberships, cosmetic procedures, or over-the-counter vitamins unless a doctor prescribes them.

The key is that the expense must be for diagnosis, treatment, or prevention of a disease or condition. If you are unsure whether something qualifies, the IRS Publication 502 lists hundreds of specific items. Your HSA provider (the bank or administrator managing your account) can also tell you whether a particular expense is allowed before you spend the money.

Spending money on non-may have access to expenses means you pay income tax on that amount plus a 20 percent penalty. That penalty does not apply after age 65, but the income tax still does. So it pays to check before you buy.

Key Takeaways

  • may have access to medical expenses include doctor visits, prescription drugs, dental and vision care, medical equipment, and hospital stays.
  • Over-the-counter items like pain relievers, allergy medicine, and cold medicine do not may have access to unless a doctor writes a prescription for them.
  • You cannot use HSA money for health insurance premiums, gym memberships, cosmetic surgery, or general wellness products.
  • 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 (except after age 65).
  • Your HSA provider or the IRS Publication 502 can confirm whether a specific expense qualifies before you spend the money.

Medical services and supplies you can pay for

Doctor visits, urgent care, and emergency room visits all may have access to. So do hospital stays, surgery, and mental health counseling. You can use HSA funds to pay your deductible, copay, or coinsurance at any of these places.

Prescription medications are covered. Over-the-counter drugs are not — unless your doctor writes a prescription for them. That means you can use HSA money for a prescription-strength pain reliever or allergy medicine, but not for the same drug bought without a prescription at the drugstore.

Medical equipment and supplies may have access to: crutches, wheelchairs, blood pressure monitors, glucose meters, hearing aids, and eyeglasses. Dental work including cleanings, fillings, root canals, and orthodontia all count. Vision care — eye exams, glasses, and contact lenses — is covered.

Preventive care and vaccines

Preventive services are covered at no cost under most health plans, but you can also use HSA money to pay for them if you choose. Annual physicals, cancer screenings, blood pressure checks, and cholesterol tests all may have access to. Vaccines for flu, pneumonia, shingles, and other diseases are covered.

Mental health screenings and counseling are may have access to expenses. So are fertility testing and certain fertility treatments. Substance abuse treatment programs are covered. The expense must be for diagnosis or prevention of a medical condition, not general wellness.

What does not may have access to: common mistakes

Health insurance premiums are not covered by HSA money, with one exception: you can use HSA funds to pay premiums for COBRA coverage or long-term care insurance. You cannot use HSA money to pay premiums for your regular health plan, Medicare, or supplemental insurance.

Gym memberships, fitness classes, and general wellness programs do not may have access to, even if your doctor recommends exercise. Cosmetic procedures — including teeth whitening, hair removal, and plastic surgery — are not covered unless they are medically necessary (for example, reconstructive surgery after an injury).

Over-the-counter items without a prescription do not may have access to: pain relievers, cold medicine, allergy medicine, antacids, and vitamins. Sunscreen, toothpaste, and deodorant are not covered. Maternity clothes, baby formula, and diapers are not medical expenses under IRS rules.

Prescription drugs and pharmacy costs

Any medication your doctor prescribes is a may have access to expense, whether it treats a chronic condition or a short-term illness. You pay for it at the pharmacy with your HSA debit card or you pay out of pocket and submit a receipt for reimbursement.

Some pharmacies require you to use your HSA card at the register. Others may ask you to pay with a different card and then submit the receipt to your HSA provider for reimbursement. Check with your pharmacy and your HSA provider about how they handle HSA payments.

Prescription insulin, inhalers, antibiotics, and blood pressure medications all may have access to. So do prescription-strength versions of drugs that are also sold over the counter. If your doctor prescribes a specific brand or dose, that prescription is covered.

Dental, vision, and hearing care

Routine dental care — cleanings, exams, and X-rays — is covered. So are fillings, root canals, extractions, and gum disease treatment. Orthodontia (braces) is a may have access to expense. Dental implants and bridges are covered if they replace missing teeth.

Vision expenses include eye exams, glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) is covered. Hearing aids and hearing tests are may have access to expenses. Replacement batteries for hearing aids are also covered.

These services are covered whether you receive them from a dentist, optometrist, ophthalmologist, or audiologist. You do not need a referral from your primary care doctor.

How to know if something qualifies before you spend

The IRS Publication 502 lists hundreds of may have access to and non-may have access to expenses. You can download it free from the IRS website and search for the specific item. It covers everything from acupuncture to X-rays.

Your HSA provider's website usually has a searchable database of may have access to expenses. Call the customer service number on the back of your HSA card and ask whether a specific expense qualifies. They can tell you in a few minutes.

If you are not sure, pay for the expense with a different card and keep the receipt. You can submit it to your HSA provider for reimbursement later if you confirm it qualifies. This protects you from accidentally spending HSA money on a non-may have access to expense and owing the penalty.

Frequently Asked Questions

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

Yes. You can use HSA money to pay for may have access to medical expenses for your spouse and any dependent children, even if they are not covered by your health plan. You do not have to be enrolled in the same insurance plan. Keep receipts showing the person's name and the nature of the expense.

Are over-the-counter pain relievers and cold medicine covered?

No, not without a prescription. Ibuprofen, acetaminophen, antihistamines, and decongestants bought over the counter do not may have access to. If your doctor writes a prescription for one of these medications, then you can use HSA money to pay for it at the pharmacy.

Can I use HSA money for my health insurance premiums?

No, except in two cases: you can use HSA funds to pay COBRA premiums or long-term care insurance premiums. You cannot use HSA money for regular health plan premiums, Medicare premiums, or supplemental insurance premiums.

What happens if I spend HSA money on something that does not may have access to?

You owe income tax on that amount plus a 20 percent penalty. If you are over 65, the penalty does not apply, but you still owe income tax. Keep receipts for all HSA spending so you can prove what the money was used for if the IRS asks.

Can I use HSA money for mental health counseling or therapy?

Yes. Mental health treatment, counseling, and therapy are may have access to expenses. You can use HSA funds to pay for visits to a psychiatrist, psychologist, or licensed therapist. Medications prescribed for mental health conditions are also covered.