What can i use my hsa card on

An eligible expense is a health care service, treatment, or item the IRS states can be paid for without taxes.

Below is a partial list of eligible expenses that are reimbursable through a Health Savings Account (HSA). Eligible expenses can be incurred by you, your spouse, or qualified dependents. The HSA can only be used to pay for eligible medical expenses incurred after your HSA was established. For more information, see the HSA Eligible Expenses flyer. For the complete list of eligible and ineligible expenses, visit www.IRS.gov and see IRS Publications 502 and 969. 

How should I keep track of my eligible expenses?

You should keep all your receipts and pertinent documentation to prove your HSA was used for eligible medical expenses.

Note: If you pay for anything other than eligible expenses with your HSA, the amount will be taxable, and you will be required to repay the amount and pay an additional tax penalty.

Changes at Age 65

Distributions 

At age 65, you can take penalty-free distributions from your HSA for any reason.

• In order to be both tax-free and penalty-free, the distribution must be for an eligible medical expense.
• Withdrawals made for other purposes will be subject to ordinary income taxes.
• Given that Medicare does not cover all of your medical expenses, most HSA owners over age 65 continue to use their HSA funds for eligible medical expenses to ensure they receive the maximum benefits from their HSA.

Health Insurance Premiums

At age 65, you can use your HSA to pay for Medicare Parts A, B, and D as well as Medicare HMO premiums tax-free and penalty-free.

• Reimburse yourself directly from your HSA for Medicare premiums deducted from your Social Security payment.
• Use your HSA to pay for the employee share of employer-sponsored healthcare premiums (provided that the employee share is not deducted pre-tax).
• You cannot use your HSA to pay for Medigap insurance premiums.

Medical

• Acupuncture
• Ambulance services
• Birth control/contraceptive devices
• Birth classes/Lamaze1
• Blood pressure monitor
• Blood sugar test kits/test strips
• Chiropractic therapy/exams/adjustments
• Copayments
• Crutches1
• Dermatology services
• Diagnostic services
• Flu shots
• Gynecological care
• Hearing aids and batteries1
• Incontinence supplies
• Infertility treatments
• Insulin and diabetic supplies
• Laboratory fees
• Lactation expenses
• Legal sterilization
• Menstrual care products
• Nasal strips
• Obstetric care
• Operations/surgery1
• Over-the-counter (OTC) treatments containing medicine (i.e. cold treatments, pain relievers, sinus medications, etc.)
• Personal Protective Equipment (PPE) for the primary purpose of preventing the spread of COVID-19 (i.e. face masks, disposable gloves, hand sanitizer, sanitizing wipes, etc.)
• Physical exams
• Physical therapy1
• Pregnancy test kits
• Sleep apnea services/products1
• Smoking cessation programs
• Therapy or counseling
• Treatment for alcohol or drug dependency
• Vaccinations
• Wrist supports/elastic straps
• X-ray fees

Dental 

• Cleanings and exams
• Crowns and bridges
• Dental plan co-pays
• Dental surgery
• Dental X-rays

Vision 

• Contact lenses and lens solution
• Diagnostic services
• Eye exams
• Eye surgery
• Laser eye surgery/LASIK
• Optometrist/ ophthalmologist fees
• Prescription eyeglasses and sunglasses
• Seeing eye dog (buying, training and maintaining)
• Vision plan co-insurance
• Vision plan deductible

1: Restrictions may apply. See IRS Publications 502 and 969 for more details.

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If you want to save for medical expenses and reduce your taxable income at the same time, you may benefit from a Health Savings Account.

Before you sign up, however, it’s important to understand that the money in these accounts may only be used for HSA qualified expenses. If you spend the money on ineligible items, expect to pay income tax and hefty penalties for your mistake.

Here’s what you need to know about HSAs and which expenses are permitted so you can make the most of the tax-free benefits.

Why should I open an HSA?

This government-regulated savings account is heavily tax-advantaged. Your income is taxed after any HSA contributions have been made, which reduces the amount of income you are taxed on. It also costs nothing to withdraw the money as long as it’s used for eligible expenses. You also have the option to invest your HSA in mutual funds or other investment tools to grow your money tax-free. Do keep in mind, however, that the amount of money you can contribute to your HSA per year is limited.

HSAs are offered through most health insurance companies, but if your provider doesn’t offer them, you can open one at a financial institution. You must be enrolled in a high-deductible health insurance plan to qualify for an HSA.

What expenses are eligible for an HSA?

The government only allows these tax advantages if you use your HSA money for qualified medical expenses. These costs generally include payment to doctors or dentists, prescriptions, imaging such as MRIs, medical services (such as home care) and medical equipment or supplies. You can also use the funds to reimburse yourself for any qualified medical expenses that your insurance didn’t cover and you had to pay out of pocket.

Examples of generally eligible expenses are hearing aids, psychological counseling, chiropractic services, condoms, breast pumps, eyeglasses, physical therapy and smoking cessation programs.

What expenses are not HSA eligible?

Rules have become stricter over the years about what expenses are eligible for HSA funds. General purchases that may benefit your overall health don’t count. Examples of no-nos from the IRS include vacations and vitamins. Other items that aren’t eligible include maternity clothes, funeral costs, child care for healthy babies, toiletries, over-the-counter medicine, swimming lessons and elective cosmetic procedures.

You also usually can’t use HSA money to pay for health insurance premiums unless you meet certain criteria. According to Optum Bank, you’re only qualified to use HSAs toward premiums if you’re enrolled in Medicare, are on COBRA continuation coverage, receive state or federal unemployment benefits, or have eligible long-term care insurance.

This page from the HSA Store has a thorough list of items that are and aren’t eligible for HSA funds, though it’s recommended you seek tax or legal advice if you aren’t sure whether your purchase is HSA-qualified.

What happens if you make unqualified purchases with your HSA account?

Be very careful not to use your HSA debit card or checks on non-eligible purchases. If you spend your HSA funds on unqualified expenses, whether intentionally or by accident, the transaction will go through, and you’ll have to pay income tax on the amount.

Yes, you read that correctly—even if you accidentally paid for a burger with your HSA debit card, you will have to report it on your annual income tax return and pay taxes on it. If you’re under 65 and spend the money on unqualified purchases, you must also pay a 20% penalty on top of the income tax. Be very careful not to use HSA money on unqualified expenses so you don’t lose a portion of your savings to taxes and penalties.

Can I buy food with my HSA card?

What can I use my HSA debit card for?

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