What a Health Savings Account Covers
A Health Savings Account (HSA) lets you pay for certain medical expenses with pre-tax money. The IRS maintains a specific list of what counts as a may have access to medical expense. If you use HSA funds for something on that list, you pay no income tax on the withdrawal. If you use it for something not on the list, you pay income tax plus a 20 percent penalty on that amount.
The core rule is this: the expense must be for diagnosis, treatment, or prevention of a disease or condition, and it must not be cosmetic. A doctor's visit for a broken arm qualifies. A doctor's visit for a cosmetic procedure does not. Most people's everyday medical costs fall into the first category.
Key Takeaways
- Doctor visits, hospital stays, prescription drugs, and dental work are covered if they treat a medical condition rather than improve appearance.
- Over-the-counter medications and supplies now count as may have access to expenses without a prescription, but only if they treat a specific medical condition.
- Health insurance premiums themselves are not covered, except for COBRA continuation coverage and long-term care insurance in limited amounts.
- Gym memberships, cosmetic procedures, and general wellness products are not covered, even if they improve your health.
- You can use HSA funds to pay for a spouse's or dependent's medical expenses, even if they are not on your health plan.
Doctor Visits, Hospital Care, and Procedures
Any visit to a doctor, specialist, or hospital for diagnosis or treatment of a medical condition is covered. This includes the office visit itself, lab work ordered by the doctor, imaging like X-rays or MRI scans, and any procedures performed. Emergency room visits and urgent care are covered. Surgery, anesthesia, and post-operative care are covered.
Mental health treatment is covered the same way: therapy sessions, psychiatric visits, and inpatient mental health treatment all count. Physical therapy and occupational therapy ordered by a doctor count. Chiropractic care counts if a doctor refers you or if your state licenses chiropractors as physicians.
You do not need a doctor's order for every expense. You can use HSA funds for a routine physical exam or preventive screening on your own. You can pay for a pregnancy test or a flu shot without a referral. The key is that the service itself must be medical in nature.
Prescription and Over-the-Counter Medications
Prescription medications are always covered, regardless of what they treat. Over-the-counter medications are now covered without a prescription, but only if they treat a specific medical condition. Aspirin for a headache counts. Antacid for heartburn counts. Allergy medicine for allergies counts.
Vitamins and supplements are not covered unless they treat a diagnosed deficiency or medical condition. A multivitamin for general health does not count. Vitamin D prescribed by a doctor for low vitamin D levels does count. The difference is whether a doctor has identified a specific medical reason you need it.
Insulin and other diabetes medications are covered. Inhalers for asthma are covered. Medications for high blood pressure, high cholesterol, or any other condition are covered. The medication itself must be approved by the FDA, but that includes most drugs you would get at a pharmacy.
Dental, Vision, and Hearing Care
Dental work is covered if it treats a medical condition or maintains dental health. Cleanings, fillings, root canals, and extractions all count. Braces count. Dentures and bridges count. Dental implants count. Teeth whitening for cosmetic reasons does not count, but teeth whitening ordered by a dentist to treat discoloration from medication or disease does.
Vision care is covered the same way. Eye exams, glasses, contact lenses, and contact lens solution all count. LASIK surgery counts. Cataract surgery counts. Treatments for glaucoma or other eye diseases count. Cosmetic procedures like eyelid lifts do not count.
Hearing aids and hearing tests are covered. Cochlear implants are covered. Batteries for hearing aids are covered. Repairs to hearing aids are covered.
What Is Not Covered
Health insurance premiums are not covered with HSA funds, with two exceptions: you can pay for COBRA continuation coverage, and you can pay for long-term care insurance up to an IRS limit that changes each year. You cannot use HSA funds to pay your regular health plan premium.
Cosmetic procedures are not covered. This includes facelifts, Botox, hair transplants, and cosmetic dentistry like veneers or whitening done purely for appearance. Gym memberships and fitness classes are not covered, even if a doctor recommends exercise. Weight loss programs are not covered unless they treat a specific medical condition like obesity-related diabetes, and even then only the medically necessary portion counts.
General wellness products are not covered. Sunscreen, toothpaste, and shampoo do not count, even if they prevent disease. Maternity clothes do not count. A cane or crutch counts, but a regular walker does not unless it is prescribed for a medical condition. The line between medical device and general product is sometimes unclear, and the IRS publishes guidance on specific items.
Expenses for someone who is not your spouse or dependent are not covered, even if you pay them. If you pay for a friend's doctor visit, you cannot use HSA funds. If you pay for a parent's medical care and they are not your dependent, you cannot use HSA funds.
Medical Equipment and Supplies
Medical equipment prescribed by a doctor is covered. Crutches, wheelchairs, walkers, and canes prescribed for a medical condition count. Blood pressure monitors, glucose meters, and thermometers count. Bandages, gauze, and medical tape count. Compression stockings prescribed for a medical condition count.
Heating pads and ice packs are not covered unless prescribed by a doctor for a specific condition. A regular bed is not covered, but a hospital bed prescribed for a medical condition is. Eyeglasses are covered, but regular sunglasses are not, even if they protect your eyes.
Fertility treatments and related supplies are covered. Pregnancy tests, ovulation kits, and medications to treat infertility count. Contraception is covered. Menopause treatments are covered.
Frequently Asked Questions
Can I use my HSA to pay for my spouse's medical expenses?
Yes. You can use your HSA to pay for any may have access to medical expense of your spouse or any dependent you claim on your tax return, even if they are not on your health plan. You do not need to be married or have them on your plan — the only requirement is that they are your dependent for tax purposes.
Is my health insurance premium covered?
No, with two exceptions. You cannot use HSA funds for your regular health plan premium. You can use them for COBRA continuation coverage if you lose your job, and you can use them for long-term care insurance up to an annual limit set by the IRS (this limit changes each year and varies by age).
What happens if I use my HSA for something not on the list?
You will owe income tax on that amount plus a 20 percent penalty. For example, if you withdraw $500 for a non-may have access to expense and you are in the 22 percent tax bracket, you will owe $110 in taxes and penalties. Keep receipts for all HSA withdrawals in case the IRS asks you to prove the expense was may have access to.
Does my doctor have to say something is covered before I use HSA funds?
No. The IRS list of may have access to expenses is public, and you can check it yourself. You do not need permission from your doctor or your HSA provider to use funds for something on the list. However, if you are unsure whether an expense counts, you can ask your HSA provider or a tax professional before you withdraw the money.
Are over-the-counter pain relievers and cold medicine covered?
Yes. Aspirin, ibuprofen, acetaminophen, decongestants, cough syrup, and antihistamines are all covered without a prescription. They must treat a specific symptom or condition — you cannot use HSA funds for general wellness products — but most people use these for a reason, so they usually count.