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
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, D and 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.
- Ambulance services
- Birth control/contraceptive devices
- Birth classes/Lamaze1
- Blood pressure monitor
- Blood sugar test kits/test strips
- Chiropractic therapy/exams/adjustments
- 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
- Nasal strips
- Obstetric care
- Physical exams
- Physical therapy1
- Pregnancy test kits
- Sleep apnea services/products1
- Smoking cessation programs
- Therapy or counseling
- Treatment for alcohol or drug dependency
- Wrist supports/elastic straps
- X-ray fees
- Cleanings and exams
- Crowns and bridges
- Dental plan co-pays
- Dental surgery
- Dental X-rays
- 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
OTC Medicines and Drugs
Over-the-counter (OTC) medicines and drugs, except for insulin, require a prescription from your physician to be reimbursable with your HSA. The prescription must be included with each request for reimbursement.
- Cold medicines
- Diaper rash ointments
- First aid supplies
- Hemorrhoid treatments
- Nicotine patches
- Pain relievers
- Sinus medications
- Yeast infection medications
1: Restrictions may apply. See IRS Publications 502 and 969 for more details.