HSA funds cover medical expenses that your health insurance doesn't pay for, plus some costs insurance won't cover at all

Your Health Savings Account holds money specifically for healthcare costs. The IRS maintains a detailed list of what counts as a medical expense, and the rules are stricter than most people expect. You can spend HSA money on deductibles, copays, and coinsurance from your insurance plan. You can also use it for costs insurance won't touch at all — like dental work, vision care, hearing aids, and some over-the-counter items — as long as they treat or prevent a diagnosed medical condition.

The key rule: the expense must be for you, your spouse, or your dependents, and it must be for diagnosis, treatment, or prevention of a disease or condition. Cosmetic procedures, gym memberships, and general wellness products don't count, even if they make you healthier. If you spend HSA money on something that doesn't may have access to, you owe income tax on that amount plus a 20 percent penalty.

Key Takeaways

  • HSA funds pay for insurance deductibles, copays, and coinsurance, as well as medical expenses your insurance doesn't cover.
  • Dental care, vision care, hearing aids, and prescription medications all may have access to, but cosmetic procedures and gym memberships do not.
  • Over-the-counter items like pain relievers and allergy medicine count only if you have a prescription or a doctor's written order for them.
  • Withdrawals for non-may have access to expenses trigger income tax plus a 20 percent penalty, so keeping records of what you spend is essential.
  • Once you turn 65, you can withdraw HSA money for any reason without penalty, though non-medical withdrawals are still taxed as income.

Medical expenses your insurance plan covers

Start with what your health insurance already pays for. Your HSA can cover the parts you pay out of your own pocket: your annual deductible, copays at the doctor's office, and coinsurance (the percentage you pay after insurance kicks in). It also covers the cost of prescription medications your plan covers, as long as you pay for them yourself first.

This is the most straightforward use of HSA money. You receive a medical bill, your insurance pays its share, you owe the rest, and you can pay that remainder from your HSA without any tax consequence. Keep the bill and your insurance explanation of benefits as proof, in case you're audited years later.

Dental and vision care

Dental work qualifies in full: cleanings, fillings, root canals, crowns, orthodontia, and tooth extraction. Vision care includes eye exams, glasses, contact lenses, and laser eye surgery. Hearing aids and the cost of fitting them also count. These are among the most common non-insurance expenses people use HSA funds for, because dental and vision insurance (when available) often has its own separate deductible and coverage limits.

Cosmetic dental work — like teeth whitening or veneers done purely for appearance — does not count. But if your dentist documents that a procedure is medically necessary (for example, a crown to save a damaged tooth), it qualifies even if it also improves how your tooth looks.

Over-the-counter medications and medical supplies

As of 2020, you can buy over-the-counter pain relievers, allergy medicine, cold medicine, and antacids with HSA funds without a prescription. Before 2020, you needed a doctor's prescription for these items. The rule changed, but only for over-the-counter drugs and medicines — not for other over-the-counter items like bandages or thermometers.

Medical supplies do count: bandages, gauze, thermometers, blood pressure monitors, glucose meters and test strips, crutches, and heating pads all may have access to. Sunscreen does not, because it's considered a cosmetic product even though it prevents sun damage. The distinction is whether the item's primary purpose is treating or preventing a specific medical condition, or whether it's a general wellness or beauty product.

Mental health and therapy services

Therapy, counseling, and psychiatric care all may have access to. You can use HSA funds to pay a therapist, psychiatrist, or counselor directly, or to cover your copay or coinsurance if your insurance plan includes mental health benefits. Inpatient treatment for substance abuse or mental health conditions also qualifies.

Self-help books, meditation apps, and online wellness programs generally do not count, even if they address mental health. The expense must be treatment provided by a licensed healthcare provider or a facility licensed to deliver that care.

Medical equipment and mobility aids

Wheelchairs, walkers, canes, crutches, and other mobility devices may have access to. So do orthopedic shoes, back braces, and compression stockings if prescribed by a doctor. Oxygen equipment, CPAP machines, and other durable medical equipment all count. You can use HSA funds to buy or rent these items.

The item must be prescribed or recommended by a doctor and used to treat a specific medical condition. A regular pair of shoes does not count, but orthopedic shoes prescribed for flat feet do. A mattress does not count, but a mattress recommended by a doctor to treat sleep apnea might — though you should document the doctor's recommendation in writing before you buy it.

Fertility treatment and family planning

Fertility treatments, including in vitro fertilization (IVF), artificial insemination, and related procedures, all may have access to. Contraception prescribed by a doctor counts. Pregnancy-related care — prenatal visits, ultrasounds, delivery, and postpartum care — qualifies whether your insurance covers it or not.

Adoption expenses do not count, even though they're related to family building. Surrogacy costs also do not may have access to. The distinction is that HSA funds cover medical treatment, not the legal or administrative costs of family formation.

What happens after age 65

Once you turn 65, the rules change. You can withdraw HSA money for any reason without the 20 percent penalty. Non-medical withdrawals are still taxed as ordinary income, but the penalty disappears. This makes an HSA function like a traditional IRA after 65 — a retirement savings account with no special restrictions on how you spend it.

Before 65, non-medical withdrawals cost you income tax plus 20 percent penalty. After 65, they cost you only income tax. This is why some people treat an HSA as a long-term retirement account and don't touch it until later in life, even though they could spend it on medical costs now.

Frequently Asked Questions

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

Yes. Your HSA can cover medical expenses for you, your spouse, and anyone you claim as a dependent on your tax return. The person receiving the care doesn't have to be on your health insurance plan — they just have to be a family member you're supporting.

Do I need to keep receipts for HSA withdrawals?

You don't have to submit receipts when you withdraw money, but you must keep them. The IRS can audit your HSA years after you spend the money and ask you to prove that each withdrawal was for a may have access to expense. Without documentation, you'll owe back taxes and penalties.

Can I use HSA funds for my pet's medical care?

No. HSA funds are for human medical expenses only. Veterinary care, even for a service animal, does not count. However, if you have a service animal and need to buy a wheelchair ramp or other equipment to accommodate it, that equipment qualifies if it's for your own medical condition.

What if I'm not sure whether an expense qualifies?

Ask your HSA provider before you spend the money. They have access to IRS guidance and can tell you whether a specific item or service counts. Getting written confirmation protects you if you're audited later. If your provider can't answer, the IRS publishes a full list of may have access to medical expenses on its website.

Can I use HSA money to pay for long-term care or nursing home costs?

Yes, but only for the medical and nursing care portion of the bill, not for room and board. If a nursing home charges separately for care and living expenses, you can use HSA funds for the care part. Some facilities bundle these costs together, so you may need to ask them to break down the bill.