What a Health Savings Account covers

A Health Savings Account can pay for most medical expenses you would normally pay out of pocket: doctor visits, prescription drugs, dental work, vision care, mental health treatment, and hospital stays. It can also cover medical equipment like wheelchairs, hearing aids, and blood pressure monitors. The IRS maintains a detailed list, but the basic rule is that if it treats, diagnoses, or prevents a medical condition and a doctor would reasonably prescribe it, your HSA can pay for it.

What your HSA cannot pay for is anything that improves general health or wellness without treating a specific medical problem. Gym memberships, vitamins, cosmetic procedures, and over-the-counter pain relievers fall into this category—though there are exceptions. Some over-the-counter items became HSA-may be able to access in 2020 if you have a prescription or doctor's note, even if you buy them without filling a formal prescription.

The money in your HSA is yours to keep. Unlike a Flexible Spending Account (FSA), which has a "use it or lose it" rule, HSA funds roll over year to year. You can also invest the balance and let it grow, making it useful as a long-term savings tool for future medical costs.

Key Takeaways

  • Your HSA can pay for doctor visits, prescriptions, dental, vision, mental health care, and medical equipment without a tax penalty.
  • Over-the-counter medications and supplies are HSA-may be able to access only if you have a prescription or written doctor's note, even if you don't fill it at a pharmacy.
  • Gym memberships, vitamins, cosmetic procedures, and general wellness items are not HSA-may be able to access unless they treat a diagnosed medical condition.
  • HSA money rolls over each year and can be invested, so you can save it for future medical expenses instead of spending it immediately.
  • Using your HSA for non-medical expenses before age 65 triggers a 20% penalty plus income tax on the withdrawal.

Medical services and treatments your HSA covers

Your HSA pays for any visit to a doctor, dentist, optometrist, or mental health professional. This includes preventive care like annual checkups and screenings, as well as treatment for illness or injury. Hospital stays, surgery, and emergency room visits are covered. Physical therapy, chiropractic care, and acupuncture are also may be able to access if a licensed provider delivers them.

Prescription medications are always HSA-may be able to access. Over-the-counter drugs and supplies—including pain relievers, cold medicine, allergy medication, bandages, and first aid items—became HSA-may be able to access in 2020 if you have a prescription or a written statement from your doctor saying you need them. You do not have to fill the prescription at a pharmacy; the doctor's note is enough. Keep the note with your receipt in case your HSA administrator asks for proof.

Mental health and substance abuse treatment, including therapy and medication-assisted programs, are fully covered. Fertility treatments, including in vitro fertilization and related medications, are HSA-may be able to access. Abortion is also HSA-may be able to access in all states.

Medical equipment and supplies

Your HSA covers durable medical equipment—devices meant to last and be used repeatedly—such as wheelchairs, walkers, canes, crutches, hearing aids, and continuous positive airway pressure (CPAP) machines. Diabetic supplies like glucose monitors, test strips, and lancets are covered. Braces, orthotics, and prosthetics are may be able to access. Oxygen equipment and supplies are covered if medically necessary.

Bandages, gauze, compression stockings, and other disposable medical supplies are HSA-may be able to access. Mobility aids like grab bars and shower chairs are covered if they treat a medical condition. Eyeglasses and contact lenses are may be able to access, as are hearing aid batteries and repairs.

The key distinction is that the equipment must treat or manage a diagnosed medical condition. A general-purpose item that happens to have a medical use—like a regular chair—is not covered, but a specialized medical chair is.

Dental and vision care

Routine dental care—cleanings, exams, and X-rays—is HSA-may be able to access. Fillings, root canals, extractions, and gum disease treatment are covered. Orthodontics, including braces and aligners, are may be able to access. Dental implants and bridges are covered. Teeth whitening is not may be able to access because it is cosmetic, but whitening done as part of a medically necessary dental procedure may be.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. LASIK and other vision correction surgery is covered. Treatments for eye diseases like glaucoma or cataracts are may be able to access. Sunglasses are not covered, even if they have a prescription, because they are considered general eyewear rather than medical treatment.

What your HSA cannot pay for

Your HSA cannot pay for cosmetic procedures—hair removal, facelifts, teeth whitening for appearance, or similar treatments—unless they are medically necessary. For example, reconstructive surgery after an accident or disease is covered, but elective cosmetic surgery is not.

General wellness and fitness are not HSA-may be able to access. Gym memberships, fitness classes, and personal training are not covered, even if your doctor recommends exercise. Vitamins, supplements, and herbal remedies are not may be able to access unless prescribed by a doctor for a specific medical condition. Sunscreen is not covered. Weight loss programs and diet plans are not covered unless they are medically supervised treatment for obesity or a related condition.

Cosmetic dentistry like veneers or bonding for appearance is not covered. Cosmetic eyewear like designer frames is not may be able to access, though the cost of the prescription lenses themselves is. Maternity clothes, cribs, and other pregnancy-related items that are not medical treatment are not covered.

Long-term care insurance premiums are not HSA-may be able to access, though some may have access to long-term care insurance premiums may be deductible in other ways. Life insurance is never HSA-may be able to access.

How to know if something is HSA-may be able to access

The IRS publishes a list of may be able to access medical expenses in Publication 502, available on the IRS website. You can also ask your HSA administrator—the bank or financial company that holds your account—whether a specific expense is may be able to access before you pay for it. Many HSA providers have online tools or customer service lines for this purpose.

A good rule of thumb: if a doctor prescribed it, ordered it, or would reasonably recommend it to treat a diagnosed medical condition, it is likely may be able to access. If it is something a healthy person would buy for general wellness, it is probably not. When in doubt, keep your receipt and any documentation from your doctor. If the HSA administrator denies a reimbursement, you can appeal or ask for clarification on why it was denied.

Be aware that may be able to access rules can shift. The IRS periodically updates what is covered, and some items have moved from ineligible to may be able to access (like over-the-counter medications in 2020). Check your HSA provider's website or Publication 502 if you are unsure about something you have not purchased before.

Using your HSA for non-medical expenses

You can withdraw money from your HSA for any reason at any time. However, if you use HSA funds for something that is not a may have access to medical expense, you will owe income tax on that amount plus a 20% penalty. The penalty applies only to the non-medical withdrawal, not to your entire HSA balance.

After age 65, the penalty goes away. You can withdraw money for any reason without the 20% penalty, though you will still owe income tax on non-medical withdrawals. This makes an HSA a useful retirement savings tool if you have other money to pay for medical expenses while you are younger.

Keep receipts for all HSA purchases. If the IRS audits your account, you may need to prove that withdrawals were for may have access to medical expenses. The burden of proof is on you to show that the money was spent correctly.

Frequently Asked Questions

Can I use my HSA to pay for my spouse's or child's medical expenses?

Yes. Your HSA can pay for medical expenses of your spouse and dependents, even if they are not covered by your health insurance plan. You do not have to be the one receiving the treatment. Keep receipts showing the relationship and the medical nature of the expense.

Are over-the-counter medications like ibuprofen HSA-may be able to access without a prescription?

Not anymore. As of 2020, over-the-counter medications require a prescription or written doctor's note to be HSA-may be able to access, even if you buy them without filling the prescription at a pharmacy. Ask your doctor to write a note saying you need the medication, and keep it with your receipt.

Can I use my HSA to pay for a gym membership if my doctor recommends it?

No. Even with a doctor's recommendation, gym memberships and fitness classes are not HSA-may be able to access because they are considered general wellness rather than treatment for a specific medical condition. However, physical therapy prescribed by a doctor for an injury or illness is covered.

What happens if I use my HSA for something that is not medical?

You will owe income tax on the amount plus a 20% penalty. The penalty applies only to the non-medical withdrawal. After age 65, the penalty no longer applies, though you still owe income tax on non-medical withdrawals.

Can I use my HSA to pay for therapy or counseling?

Yes. Mental health treatment, including therapy, counseling, and psychiatric medication, is fully HSA-may be able to access. This includes treatment for depression, anxiety, substance abuse, and other mental health conditions.