Medical expenses you can pay for with HSA funds

You can use HSA money for any medical expense that the IRS classifies as a may have access to medical expense. This includes doctor visits, hospital stays, surgery, prescription drugs, dental work, vision care, and mental health treatment. You can also pay for medical equipment like wheelchairs, crutches, hearing aids, and blood pressure monitors. The expense has to be for you, your spouse, or your dependents — not for anyone else.

The key rule: the expense must be for diagnosis, treatment, or prevention of a disease or condition. Routine checkups count. So do vaccines, lab tests, X-rays, and physical therapy. If your doctor prescribes it or recommends it as medically necessary, it almost always qualifies. You do not need a prescription for some items — over-the-counter pain relievers, allergy medicine, and antacids are covered, but you do need a receipt showing you bought them for medical reasons.

Cosmetic procedures do not count unless they treat an injury or disease. Botox for wrinkles is not covered. Botox for migraines prescribed by a neurologist is. Teeth whitening is not covered. Dental crowns, fillings, and root canals are. The distinction turns on whether the procedure treats a medical condition or is purely for appearance.

Key Takeaways

  • HSA funds cover doctor visits, prescriptions, hospital care, dental work, vision care, and mental health treatment for you and your dependents.
  • Over-the-counter medicines and medical supplies count if you have a receipt and can show they were for a medical purpose.
  • Cosmetic procedures are not covered unless they treat an injury or disease — the IRS distinguishes between medical treatment and appearance.
  • You can use HSA money to pay insurance premiums in specific situations: COBRA coverage, long-term care insurance, and health insurance while unemployed.
  • Gym memberships, vitamins, and general wellness products are not covered, even if they support your health.

Insurance premiums you can pay with HSA funds

You can use HSA money to pay certain health insurance premiums, but not all of them. You cannot use it to pay the monthly premium for your regular health insurance — that money comes from your paycheck before the HSA contribution is made. You can, however, use HSA funds to pay premiums for COBRA coverage if you lose your job and elect to continue your employer's health plan.

You can also use HSA money to pay premiums for long-term care insurance, which covers nursing home care, assisted living, or in-home care if you become unable to care for yourself. There are age-based limits on how much you can spend this way — the IRS sets a maximum annual premium depending on your age — but the option exists. Additionally, if you are unemployed and buy health insurance on your own, you can use HSA funds to pay those premiums.

Medicare premiums are another exception. Once you turn 65 and enroll in Medicare, you can use HSA money to pay Part B premiums (doctor and outpatient care), Part D premiums (prescription drugs), and Medigap premiums (supplemental coverage). You cannot use it for Medicare Part A (hospital insurance) if you are already receiving Social Security, because Part A premiums are automatically deducted.

Expenses that do not may have access to for HSA spending

Gym memberships and fitness classes are not covered, even if your doctor recommends exercise. General wellness products — vitamins, supplements, protein powder, weight-loss programs — are not covered unless prescribed by a doctor for a specific medical condition. Sunscreen is not covered. Toothbrushes and toothpaste are not covered. These are considered general health maintenance, not treatment of disease.

Cosmetics and personal grooming are not covered. Hair loss treatments are not covered unless prescribed for a medical condition like alopecia. Maternity clothes are not covered. Childcare is not covered, even if you need it to work. Diaper rash cream is not covered — but prescription-strength diaper treatments prescribed by a pediatrician are.

Travel to receive medical care is not covered. You cannot use HSA funds to pay for a plane ticket to see a specialist in another state, even if the specialist visit itself is a covered expense. However, if you are hospitalized while traveling, you can use HSA money to pay the hospital bill. The rule is: the treatment is covered, but the logistics of getting there are not.

How to document and pay for covered expenses

You do not need to submit receipts to your HSA provider every time you make a purchase. You can simply withdraw money and pay out of pocket, then keep your receipts at home in case you are audited. The IRS can ask you to prove that money you withdrew was actually spent on covered expenses, so hold onto documentation for at least three years.

Many HSA providers issue a debit card that you can use at pharmacies, doctor offices, and hospitals. When you swipe it, the transaction is flagged as medical. Some providers will automatically reject the card if you try to use it at a non-medical merchant — a grocery store or gas station — to prevent accidental misuse. Other providers allow the transaction but flag it for review.

If you withdraw money from your HSA and pay cash or use a personal credit card, you are responsible for keeping the receipt. Write down what the expense was for, the date, the provider, and the amount. If you lose the receipt, you can sometimes get a duplicate from the provider or your insurance company. The burden is on you to document that the money went to a covered expense.

What happens if you spend HSA money on non-covered expenses

If you withdraw HSA money and spend it on something that does not may have access to — a gym membership, vitamins, or a vacation — you owe income tax on that amount plus a 20 percent penalty. The penalty applies only to the non-may have access to expense, not to your entire HSA balance. So if you withdraw $500 and $100 of it goes to a non-covered expense, you pay income tax plus a 20 percent penalty on that $100.

The penalty does not apply after age 65. Once you turn 65, you can withdraw HSA money for any reason without penalty — you will still owe income tax on non-medical withdrawals, but not the 20 percent penalty. This makes an HSA function like a retirement account after 65, similar to a traditional IRA.

If you are unsure whether an expense qualifies, ask your HSA provider or check the IRS Publication 502, which lists covered medical expenses in detail. Some providers have online tools that let you search whether a specific item or service is covered. It is better to ask before you spend than to discover later that you owe a penalty.

Dependent care and other special situations

You can use HSA money to pay for medical expenses for your spouse and dependents, even if they are not covered by your health plan. If your spouse has their own health insurance through their employer, you can still use your HSA to pay their medical bills. If your adult child is no longer on your insurance but you claim them as a dependent on your taxes, you can use your HSA for their medical expenses.

You cannot use HSA money to pay for someone else's medical expenses if you do not claim them as a dependent. If you want to help a parent or sibling pay a medical bill, you cannot use your HSA unless you claim them as a dependent and meet the IRS definition of dependent.

Fertility treatments, including in vitro fertilization (IVF), are covered as medical expenses. Adoption costs are not covered. Pregnancy-related care, including prenatal visits, delivery, and postpartum care, is covered. Contraception is covered. Abortion is covered.

Frequently Asked Questions

Can I use my HSA to pay for my spouse's health insurance premium?

Not for their regular employer health plan premium. You can use HSA funds to pay COBRA premiums if your spouse loses their job, or to pay premiums for individual health insurance if they are unemployed. You cannot use it to pay their employer plan premium because that is not a may have access to medical expense under IRS rules.

Is acupuncture covered by HSA?

Yes, if it is prescribed or recommended by a licensed healthcare provider to treat a medical condition. Acupuncture for chronic pain, migraines, or nausea is typically covered. Acupuncture for general wellness or stress relief without a medical diagnosis is not covered.

Can I use HSA money to pay for my pet's medical care?

No. HSA funds are for human medical expenses only. Veterinary care does not may have access to, even if your pet is a service animal. However, if you have a service dog and need to pay for training or certification, some of those costs may be deductible as a medical expense on your taxes — but not from your HSA.

What if I buy something at a drugstore that is both medical and non-medical, like a first aid kit?

You can use HSA funds if the item is primarily medical. A first aid kit is covered. A bottle of shampoo is not, even if you buy it at a pharmacy. If you buy a combination product, you may need to allocate the cost — for example, if you buy a multi-vitamin and pain reliever combo pack, only the pain reliever portion qualifies.

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

Yes. Mental health treatment, including therapy, counseling, and psychiatric care, is a covered medical expense. You can use HSA funds to pay a therapist, psychiatrist, or counselor. Prescription medications for mental health conditions are also covered.