Funds in your HSA can be withdrawn tax-free to pay for qualified medical expenses

The following two lists give you a general overview of qualified and non-qualified expenses. Notice that your MyHSA can be used for all kinds of medical expenses your health plan may not cover: dentistry, eyeglasses, psychotherapy, and even health-related home improvements among others. HSA funds may even be used for eligible expenses for your spouse or tax dependents.

These lists are not all-inclusive, and are subject to change by the IRS. Important: Any HSA funds used for non-qualified expenses will be taxable. Non-qualified distributions could also be subject to a 20% IRS penalty. You should consult your tax advisor if you are in doubt about a particular expense.

Qualified Medical Expenses include:

  • Acupuncture
  • Alcoholism treatment
  • Alcoholism treatment
  • Amounts covered under another health plan
  • Annual physical examination
  • Artificial limb
  • Birth control pills and other contraceptive devices (by prescription)
  • Body Scan
  • Braille books and magazines
  • Breast reconstruction surgery
  • Chiropractor
  • Christian Science Practitioner
  • Contact lenses
  • Cosmetic surgery and procedures (if related to accident, birth defect, or disease)
  • Convalescent home (medical)
  • Crutches
  • Dental x-rays
  • Dentures
  • Drug addiction therapy
  • Exercise equipment (by prescription)
  • Eyeglasses
  • Fluoridation unit
  • Guide dog
  • Handicap equipment
  • Healing services
  • Hearing aids and batteries
  • Heating devices (if therapeutic)
  • Home care
  • Home improvements (health-related only, e.g., wheelchair access)
  • Hydrotherapy
  • Invalid chair
  • Laboratory test
  • Lactation expenses
  • LASIK eye surgery/vision correction surgery
  • Lead paint removal
  • Legal fees (required to authorize health treatment)
  • Lodging (away from home for outpatient care)
  • Nurses (registered)
  • Nursing home and services (including board and meals)
  • Ophthalmologist, optician, and optometrist
  • Orthodontia (not for cosmetic reasons)
  • Orthopedic shoes
  • Over-the-counter items (non medication), see page 2 for further details
  • Oxygen and oxygen equipment
  • Prenatal care
  • Prescription medicines
  • Prosthesis
  • Psychiatric care
  • Psychoanalysis
  • Psychologist
  • Reclining chair (prescribed)
  • Sickroom supplies
  • Special school or home costs for the physically and mentally impaired
  • Splints
  • Stop-smoking programs
  • Surgery
  • Telephone/TV for impaired
  • Therapy equipment
  • Transportation expenses (relative to healthcare)
  • Tuition for child with learning disability
  • Ultra-violet ray treatment
  • Vaccines
  • Vasectomy
  • Weight-loss program (if prescribed by a physician for a specific disease)
  • Wheelchairs
  • Whirlpool bath (by prescription)
  • X-ray

Non-Qualified Medical Expenses include:

  • Athletic club membership
  • Car insurance premium (medical portion)
  • Boarding school fees and child care
  • Commuting expenses of a disabled person
  • Cosmetic surgery and procedures (unless due to accident, birth defect, or disease)
  • Cosmetics, hygiene products, and similar items
  • Diaper service
  • Domestic help
  • Fitness programs/health club dues
  • Funeral, cremation, or burial expense
  • Illegal operations and treatments
  • Illegally procured drugs
  • Maternity clothes
  • Over-the-counter medication (unless accompanied by a prescription), see below for further details
  • Premiums for life insurance, income protection, disability, loss of limbs or sight
  • Scientology counseling
  • Social activities
  • Special foods or beverages
  • Swimming pool
  • Teeth-whitening services & products
  • Toothpaste and mouthwash
  • Travel for general health improvement
  • Tuition and travel expenses to send a special needs child to a particular school
  • Weight loss programs

Eligibility of Over-the-Counter (OTC) items as of January 1, 2011

Healthcare reform legislation signed into law in March 2010 impacts OTC purchases with HSAs as of January 1, 2011. While some OTC items will maintain current eligibility status, certain drugs and medicines will require a prescription to be considered an eligible expense.

Eligible over-the-counter items:

  • Band aids
  • Birth control
  • Braces and supports
  • Contact lens solution and supplies
  • Elastic bandages and wraps
  • First aid supplies
  • Reading glasses

Ineligible over-the-counter medications:
(unless accompanied by a prescription):

  • Acid controllers
  • Acne medication
  • Allergy and sinus
  • Antibiotics
  • Anti-itch and insect bite
  • Cough, cold and flu medicine
  • Eye drops
  • Indigestion
  • Laxatives
  • Motion sickness
  • Nasal sprays
  • Ointments and creams
  • Pain relief
  • Respiratory treatments
  • Sleep aids and sedatives
  • Stomach remedies

Qualified medical expenses are those expenses generally described in IRS Publication 502 titled, “Medical and Dental Expenses,” Catalog Number 15002Q. You can order the publication by calling (800) TAX-FORM or see it online at https://www.irs.gov/pub/irs-pdf/p502.pdf.

Qualified medical expenses are those that have not been compensated or reimbursed by insurance or otherwise.

About MyHSA

MyHSA is a different kind of HSA, it’s a better HSA. MyHSA is designed for the long term while making it easy for you to access your money to pay for medical expenses that you have today. (More)

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