Medical expenses you can pay for with HSA funds

Your HSA money can pay for most things a doctor bills you for: office visits, lab work, imaging, surgery, hospital stays, and prescription drugs. It also covers dental work (cleanings, fillings, root canals, orthodontia), vision care (eye exams, glasses, contact lenses), and hearing aids. Mental health treatment, physical therapy, and chiropractic care count. If a licensed provider bills you for it and it treats or prevents a medical condition, the IRS generally allows it.

The key rule is that the expense must be for diagnosis, treatment, or prevention of disease. A doctor's visit for a broken arm qualifies. A gym membership does not, even if your doctor recommends exercise. A prescription for blood pressure medication qualifies. Over-the-counter vitamins do not, unless a doctor prescribes them for a specific deficiency.

You can use HSA funds to pay your insurance premiums in limited situations: COBRA continuation coverage, long-term care insurance, and health insurance while you are unemployed and receiving federal unemployment benefits. You cannot use HSA money to pay premiums for your regular employer health plan or Medicare premiums (with one exception: you can pay Medicare premiums after age 65, but only for Part B, Part D, and supplemental coverage — not Part A).

Key Takeaways

  • HSA funds cover doctor visits, prescriptions, dental work, vision care, and mental health treatment — anything a licensed provider bills you for to treat or prevent disease.
  • Over-the-counter items like pain relievers, cold medicine, and vitamins do not count unless a doctor prescribes them for a diagnosed condition.
  • Gym memberships, cosmetic procedures, and general wellness products are not covered, even if they improve your health.
  • You can use HSA money to pay COBRA premiums and long-term care insurance, but not your regular employer health plan premiums.
  • After age 65, you can use HSA funds to pay Medicare Part B and Part D premiums, but the rules are strict about which types of coverage may have access to.

Over-the-counter items and when they count

Over-the-counter drugs and supplies have a specific rule: they count only if a doctor writes a prescription for them. This means your doctor must document that you have a condition requiring that specific item. A prescription for ibuprofen for chronic pain counts. Buying ibuprofen on your own for a headache does not.

This rule applies to pain relievers, cold medicine, allergy medicine, antacids, and similar items. It also applies to medical supplies: bandages, thermometers, blood pressure monitors, and glucose monitors count only with a prescription. Sunscreen, toothpaste, and deodorant never count, even with a prescription, because they are not treating a disease.

The IRS publishes a list of specific items that do and do not count. If you are unsure whether something qualifies, ask your HSA provider or your doctor before you buy it. Spending HSA money on non-may have access to items means you owe income tax on that amount plus a 20 percent penalty.

Dental, vision, and hearing care covered by HSA

Dental expenses covered by HSA include routine cleanings, fillings, root canals, extractions, crowns, bridges, dentures, and orthodontia (braces and aligners). You can pay for a dentist visit whether or not your health plan covers dental. You can also use HSA funds to pay your dental insurance premiums if you have a separate dental plan.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. LASIK and other corrective surgery count. You can use HSA money to pay a vision insurance premium as well. Hearing aids and related services are covered, including the device itself, fitting, and repairs.

One common mistake: cosmetic dental work (teeth whitening, veneers for appearance only) does not count unless it is part of reconstructive surgery after an injury or disease. Cosmetic vision procedures like LASIK for convenience (rather than correcting a diagnosed refractive error) may not count — check with your HSA provider first.

Mental health, therapy, and prescription costs

Mental health treatment is a covered medical expense. This includes therapy or counseling with a licensed therapist, psychologist, or psychiatrist. Psychiatric medications prescribed by a doctor count. Inpatient treatment for mental health conditions, including residential rehab programs, is covered. You can use HSA funds to pay your mental health insurance premium if you have one.

Prescription drugs for any condition — mental health, chronic disease, acute illness — are covered when filled at a pharmacy with a valid prescription. This includes birth control pills, antidepressants, diabetes medications, and antibiotics. The drug must be prescribed by a licensed provider and dispensed by a licensed pharmacy or mail-order service.

Therapy-related expenses sometimes may have access to if they are part of medical treatment. For example, physical therapy after surgery or for a diagnosed injury counts. Massage therapy counts only if a doctor prescribes it as treatment for a specific medical condition, not for general wellness.

What does not count: cosmetic, wellness, and lifestyle expenses

Cosmetic procedures do not count unless they are reconstructive — meaning they repair damage from injury, disease, or surgery. Botox, facelifts, and teeth whitening for appearance are not covered. Reconstructive surgery after a car accident or cancer treatment is covered.

General wellness expenses do not count: gym memberships, fitness classes, diet programs, and nutritional supplements (unless prescribed by a doctor for a specific deficiency). Spa services, massage for relaxation, and weight loss programs do not count. Maternity clothes, cribs, and baby formula do not count, even though they are pregnancy-related.

Travel to receive medical care does not count — you cannot use HSA funds for airfare or hotel to see a specialist in another city. However, mileage to medical appointments counts as a medical expense under IRS rules (you can deduct it from your taxes, though not from your HSA).

How to document and pay for covered expenses

Keep receipts and invoices for everything you pay with HSA funds. The IRS does not require you to submit receipts when you withdraw money, but you must be able to prove the expense was medical if you are audited. A receipt showing the date, provider name, amount, and what was provided is the standard proof.

You can pay for a covered expense in three ways: use your HSA debit card at the point of service (the provider's office or pharmacy), pay out of pocket and then withdraw money from your HSA to reimburse yourself, or ask your HSA provider to pay the provider directly. Each method requires documentation. If you use the debit card, the transaction should be coded as medical automatically, but keep the receipt anyway.

If you pay out of pocket and withdraw later, you can do this years after the expense occurred — there is no time limit on reimbursement. This is a common strategy: pay medical bills with personal funds, leave the HSA untouched to grow, and withdraw for reimbursement in retirement when you need the money.

HSA spending in retirement and after age 65

After age 65, HSA rules change. You can still use HSA funds for any may have access to medical expense without penalty. But you can also withdraw money for any reason — the funds become like a regular savings account. If you withdraw for non-medical reasons, you owe income tax on that amount, but not the 20 percent penalty that applies before age 65.

At age 65, you can start using HSA funds to pay Medicare premiums. You can pay Part B premiums (doctor and outpatient care), Part D premiums (prescription drugs), and supplemental Medigap insurance premiums. You cannot pay Part A premiums (hospital insurance) unless you are paying them retroactively for a period when you were not yet enrolled.

Many people use HSA funds strategically in retirement: they pay medical bills out of pocket while working, let the HSA grow tax-free, and then use it to cover healthcare costs and Medicare premiums after 65. This is legal and common. Keep records of medical expenses you paid out of pocket, because you can reimburse yourself from the HSA at any point in the future.

Frequently Asked Questions

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

Yes, if your spouse is on your tax return as a dependent. You can use HSA funds to pay for their doctor visits, prescriptions, dental work, and other covered medical expenses. The expense must still be for diagnosis, treatment, or prevention of disease — the same rules apply.

Does my HSA cover over-the-counter pain relievers without a prescription?

No. Over-the-counter drugs and supplies require a doctor's prescription to be covered by HSA. Your doctor must write a prescription specifically for that item. Buying ibuprofen or cold medicine on your own does not count, even if you use it for a medical reason.

What happens if I spend HSA money on something that is not covered?

You owe income tax on that amount plus a 20 percent penalty. For example, if you withdraw $100 for a non-covered expense, you pay income tax on the $100 plus $20 in penalties. Keep receipts so you can prove expenses are medical if audited.

Can I use my HSA to pay for life insurance or disability insurance?

No. Life insurance and disability insurance are not medical expenses. HSA funds can only pay for diagnosis, treatment, or prevention of disease. Long-term care insurance is an exception — you can use HSA funds for that.

Do I have to spend my HSA money every year, or can I save it?

HSA funds roll over year to year with no limit. Unlike a Flexible Spending Account (FSA), there is no "use it or lose it" rule. You can save HSA money for decades and use it whenever you have a covered medical expense.