HSA Qualifying Expenses: Find Out What’s Included

HSA qualifying expenses are the items you're allowed to claim to withdrawal your health savings account money tax-free.

Healthcare expenses can have a serious negative impact on your finances, especially when the costs are unexpected. 

Thankfully, the Health Savings Account (HSA) allows you to plan ahead and set aside money for future medical expenses, using pre-tax dollars. 

But how do you know which medical expenses are eligible to be reimbursed under HSA rules? This article covers a list of common qualifying expenses, and some that are not eligible. We also explain how the HSA works, and answer some common questions. 

What Is an HSA Account?

A Health Savings Account is a tax-sheltered savings account that enables you to save towards future health care expenses. You can withdraw funds tax-free from your HSA to cover qualifying medical bills, deductibles, copayments, and other expenses not covered by your health insurance plan. But always check before making withdrawals, as unqualified distributions are subject to income tax (more on that later). 

Who Can Contribute To An HSA Plan? 

Not everyone is eligible to contribute to an HSA. To qualify, you must meet the following requirements: 

• You must have a High Deductible Health Plan (HDHP)*
• You cannot have other health coverage (typically a requirement for HDHP) 
• You cannot be enrolled in Medicare 
• You can't be listed as a dependent on another person's tax return

*HDHPs have a higher deductible than traditional insurance plans, so the plan holder is responsible for more out-of-pocket expenses before the insurance kicks in. 

New! OBBBA Changes to HSA Plans

The IRS recently released a notice covering changes to HSA plans arising from the One Big Beautiful Bill Act (OBBBA). The changes pertain to various HSA elements. Of note, the OBBBA "makes permanent a safe harbor for the absence of a deductible for telehealth and other remote care services..." This safe harbor was initially established in the Coronavirus Aid, Relief, and Economic Security Act of 2020, on a temporary basis. You can read the full notice here. 

Common HSA Qualifying Expenses

When you withdraw from a Health Savings Account to pay for qualifying medical expenses, you can reduce your healthcare costs while enjoying some tax benefits. Here is a list of some common HSA-eligible medical expenses. For a more complete list, refer to IRS Publication 502. 

Medical Services

• Acupuncture: You can include money spent on acupuncture treatments.
• Ambulance Services: You can include the amount spent on ambulance services.
• Chiropractic Services: Chiropractic treatments, such as spinal adjustments and therapeutic massages, can be included. 
• Dental Services: Routine and specialized dental care, including cleanings, fillings, crowns, and orthodontic work, is included. 
• Doctors Fees: Fees paid for primary care visits, specialist visits, and surgeon fees.
• Hospital Services: Includes expenses related to surgery, X-rays, lab tests, and emergency room visits.
• Long-Term Care Services: Must be required by a chronically-ill individual and prescribed by a licensed health care professional.
• Mental Health Services: Included counseling and therapy, treatment for substance abuse, and psychiatric consultations.   
• Vision Care: Includes eye exams, glasses, and contact lenses. 

Prescription and Over-The-Counter Medications

• Birth Control Pills: You can claim the amount you pay for pills subscribed by your doctor. 
• Prescribed Drugs: Medications prescribed by a healthcare provider, such as antibiotics, insulin, and blood pressure medication.

Medical Supplies and Equipment

• Diagnostic Devices: You can include equipment used to diagnose various medical conditions, like glucose meters and blood pressure monitors.
• Durable Medical Equipment: Includes wheelchairs, walkers, and CPAP machines. 
• First Aid Supplies: You can include basic first aid supplies used at home, including bandages, gauze, antiseptic ointments, and thermometers. 
• Hearing Aids: Includes hearing aids, hearing aid batteries. 
• Insulin Supplies: Injections, syringes, insulin pumps are included.

Preventative Care

• Screenings: Routine screenings and preventive tests, including mammograms, colonoscopies, and prostate exams, are HSA-eligible. 
• Immunizations: Money spent on vaccinations and booster shots can be reimbursed under HSA rules. This includes flu and tetanus shots, and the HPV vaccine.

Medical Procedures

• Breast Reconstruction Surgery: Expenses incurred for breast reconstruction surgery, including post-mastectomy breast prothesis due to cancer, are considered HSA-eligible. 
• Eye Surgery: If you've received corrective eye surgery, including laser surgery or radial keratotomy, you can use HSA funds to cover the expense. 
• Operations: Medical costs incurred for legal operations, not including cosmetic surgery, are considered HSA qualifying expenses. 
• Transplants: If you are a donor or possible donor of a kidney or other organ, you can include medical expenses incurred for related medical care. 

Travel and Lodging

• Transportation: Transportation expenses incurred for the purpose of receiving medical care are eligible. Examples include bus, taxi, plane, train, or cab fares, ambulance expenses. 
• Lodging: Accommodation expenses when receiving medical care away from home are included. This includes the cost of meals and lodging at a hospital or a hotel stay during a prolonged medical treatment. 
• Home Improvements: Home improvements with a medical necessity such as elevators, ramps, expanded doorways, or wheelchair lifts.

Mischellaneous Expenses

• Fertility Treatments: Surgery or other procedures to assist with conception, including in vitro fertilization, egg, and sperm storage are included. 
• Physical Therapy: Physical therapy expenses incurred to recover from an injury or surgery are considered eligible under HSA rules.
• Smoking Cessation Programs: Treatments to quit smoking are included. However, you can't claim expenses for non-prescription aids, such as nicotine gum or patches.
• Weight Loss Programs: The cost of weight-loss programs prescribed by a doctor to treat a diagnosed disease, such as obesity, hypertension, or heart disease, can be reimbursed under HSA rules.

How Do HSA Reimbursements Work?

Typically, you will be required to pay for medical expenses upfront until you reach the annual deductible for your HDHP plan. You can then request your HSA trustee to send you a tax-free distribution from your HSA account. 

You can use these distributions to cover qualifying medical expenses incurred after you opened your HSA account. Keep in mind that ineligible distributions are subject to income tax, and you may be required to pay an additional 20% tax. 

Whose Medical Expenses Are Eligible?

You can claim medical expenses for yourself, and for someone who was your spouse or dependent at the time they received a medical service, or when you paid for their medical expense. 

What Expenses Are Not Included? 

While they may be beneficial to your health and wellness, not all medical-related expenses are eligible under HSA rules. Here are some expenses that are not included: 

• Babysitting/Childcare 
• Controlled Substances (i.e. marijuana) 
• Cosmetic Surgery 
• Electrolysis/Hair Removal 
• Funeral Services 
• Insurance Premiums 
• Maternity Clothes '
• Non-prescription drugs aside from insulin (i.e., Aspirin, Advil)
• Teeth Whitening 
• Weight-Loss Program (unless diagnosed and treated by a physician)

For a full list, refer to IRS Publication 502. 

Bottom Line

While our list includes many common expenses, it's not exhaustive. For more details on what's covered under HSA rules, make sure you check the IRS guidelines or speak with an HSA administrator. After all, you want to ensure that your expenses will qualify, or you may be subject to income tax when you withdraw HSA funds. 

FAQs

Can I use my HSA for vitamins?

Vitamins purchased over the counter are not considered eligible medical expenses for HSA purposes. Over the counter medications, such as headache, flu, or cold medications, are also not included. 

Can I use my HSA for glasses? 

Yes. Expenses related to vision care, including prescription eyeglasses and contact lenses, are eligible. 

Can I cover my health insurance premiums through my HSA?  

No. Insurance premiums are not considered a qualifying expense under HSA rules. 

Can I claim expenses incurred before I opened my HSA plan?

No. Medical expenses that you incurred prior to opening your HSA are not considered qualifying medical expenses, for HSA purposes.  

Is an Apple Watch considered a medical device for HSA purposes? 

It's unlikely that you can claim the cost of an Apple Watch. According to the HSA Store, a fitness tracker, such as a FitBit, must be a Letter of Medical Necessity from a doctor to qualify as an HSA-eligible medical expense. You can check with your doctor, but you would likely require a specific medical reason to use the fitness tracker. Even if your doctor completes the LMN form, there is no guarantee that it will be accepted.