Unlock the Power of Your HSA: Pay for a Chiropractor & Chiropractic Care from your Health Savings Account

How Your HSA Helps You Choose Your Own Doctor

When you use a health savings account, you have total freedom to choose your own doctor!

This is a major advantage over routing your healthcare business through most traditional commercial health insurance plans. Here’s why:

Most traditional health insurance policies sold today, and most workplace group insurance policies, are managed care plans, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), and exclusive provider organizations (PPOs). These types of plans restrict benefits if you go out of network.

But everything you have in an HSA is your money, not the insurance company’s money. Even if your employer made the contribution. So when you use an HSA to pay for chiropractic care, or anything else, you aren’t limited to a managed care plan’s limited network of authorized care providers.

With your HSA, you can see any provider you want. For chiropractic care, or any other qualified healthcare expense. 

Does My Insurance Cover Chiropractic Care?

Not necessarily. 

Some plans do, but many traditional health insurance plans don’t cover chiropractic care, or provide very limited coverage for chiropractic care and other forms of alternative care. Whether your insurance covers chiropractic care or not depends on the specific terms and conditions of your insurance policy.

Understanding your health insurance plan’s coverage for chiropractic care is crucial.

To find out if your insurance covers chiropractic care, you can check your policy documents or contact your insurance provider directly. They will be able to provide you with information on what types of services are covered and any applicable copayments or deductibles.

It’s worth noting that even if your insurance does cover chiropractic care, you may still have a significant deductible or coinsurance requirement.  There may be limits on the number of visits or the types of treatments that are covered.

In this case, as long as your chiropractic care qualifies as an authorized medical expense, you can use your HSA to cover all your out-of-pocket expenses – tax free, up to the dollar amount you have in the account.

As always,  it’s best to check with your insurance provider to fully understand your coverage for chiropractic care and alternative health care.

HSA Myths: What are the Common Misconceptions and Concerns about HSAs and Chiropractic Care?

Here are some of the most common misconceptions people have about HSAs and how they apply to chiropractic care:

1. HSAs are difficult to manage.
   Contrary to popular belief, HSAs are not difficult to manage. You can easily deposit money into your account on a monthly or yearly basis and use it to pay for medical expenses. Additionally, many HSA providers offer intuitive tools and resources to help you monitor and control your account, such as web portals, mobile apps, and educational articles and videos.
2. HSAs require me to keep my money in savings accounts that provide a lousy return.
   Not true. If you have money in your HSA that you don’t expect to need right away, you can invest them in a mutual fund or other investments, using a self-directed HSA account. These may help you generate a higher return on your HSA money than you would if you left it alone in the original HSA account. Your self-directed HSA investments still receive the same tax benefits they would in a conventional HSA. Naturally, there are risks associated with these investments, as well. You should be aware of the potential risks of self-directed HSA investing as well as the reward.
3. Chiropractic care is not a valid medical expense.
   Contrary to this belief, chiropractic care is considered a qualified medical expense if used to treat a specific diagnosed medical condition and can be paid for using your HSA funds.
4. HSAs can only be used for traditional medical treatments.
   HSAs can also be used for any type of alternative medicine, including chiropractic care, acupuncture, energetic healing modalities, and even massage therapy. The catch: for it to be a qualified medical expense, you need a diagnosis of a specific medical condition. You can’t use HSA money to pay for chiropractic care or other alternative forms of care for general wellness purposes.
5. You need a referral from a primary care physician to use HSA funds for chiropractic care.
   You never need referral or permission from your insurance company, your employer, or anybody else to use your HSA funds for chiropractic care, or any other medical expense.
   
6. HSA funds can only be used for chiropractic adjustments.
   HSA funds can be used for any medical services you receive from the chiropractor, as long as they are related to a specific medical condition. This would include adjustments, X-rays and other diagnostic tests, or any other prescribed therapies and treatments.
7. HSA funds must be used by the end of the year, or they will be lost.
   Unlike flexible spending accounts (FSAs), HSA funds do not have a “use it or lose it” policy. Your HSA funds will continue to roll over from year to year, tax-deferred, allowing you to save and invest for future medical expenses. Any amounts remaining are available to supplement your retirement savings penalty-free, starting at the age of 65. You just have to pay income taxes on withdrawals, but there’s no more 20% penalty for withdrawals for purposes other than qualified healthcare expenses.
8. You cannot use your HSA for chiropractic care if you have other insurance coverage.
   You can use your HSA to pay for chiropractic care or any other qualified medical expense, even if you have other insurance coverage. HSA funds can be used to cover copayments, deductibles, or any out-of-pocket expenses related to your chiropractic care that your insurance does not cover.

Examples of Using an HSA to Pay for a Chiropractor

Here are some common circumstances where HSAs have tremendous advantages in helping you pay for chiropractic and other forms of health care. 

In each of these examples, individuals have successfully used their HSAs to pay for chiropractic care, taking advantage of the tax benefits and flexibility offered by these accounts.

When You Should Not Use an HSA for your Chiropractor

If you have an HSA, you always want to run all your out-of-pocket medical expenses through it.

This will enable you to spend pre-tax money, rather than post-tax money. So your money will go a lot further. Especially if you are in a higher tax bracket. 

But if you have the funds available to pay the expense without withdrawing money from your HSA, here’s one idea you may also want to consider: leave the money in the HSA for now, and reimburse yourself later.

If you leave your money in your HSA, it will continue to grow tax-deferred. If you open a self-directed HSA, you can put the money in stocks, mutual funds, or almost anything else you want. If it grows in value or pays out dividends, you normally  pay no taxes on this growth as long as the money stays in your HSA.

Later – even years later – you can withdraw the money to reimburse yourself for that expense. That way you can benefit from the tax-deferred growth that the HSA offers. Just make sure you save your receipts!

What happens if you use HSA for non-medical expenses?

If you use your HSA funds for non-medical expenses, such as entertainment or travel expenses, you will be subject to penalties and taxes. The IRS imposes a 20% penalty on non-qualified distributions from an HSA, in addition to any income tax owed on the distribution.

To avoid penalties and taxes, it’s important to only use your HSA funds for eligible medical expenses as defined by the IRS guidelines.

How To Maximize Your HSA Funds

Here are some excellent strategies for maximizing the benefit of your HSA account:

1. Contribute the maximum amount allowed.
   By contributing the maximum allowed amount to your HSA, you maximize your tax savings and potential for growth through investments. In 2023, the maximum contributions are $3,850 for individuals and $7,750 for families.Those 55 years old and above (and not enrolled in Medicare) can contribute an additional $1000 as a catch-up contribution. If you’re confident you won’t need to access your HSA money for anything other than qualified medical expenses until at least age 65, it may make sense to prioritize HSA contributions over traditional IRA contributions and some  unmatched retirement account contributions.
2. Use HSA funds only for qualified medical expenses.
   To avoid being charged income tax and the 20% penalty, it’s important to restrict the use of your HSA funds to eligible medical expenses only.
3. Invest your HSA funds.
   By investing your unused HSA funds via a self-directed retirement account, you can potentially get a higher return on your savings than you could by leaving them in an off-the-shelf HSA product. In addition to HSA savings accounts, most HSA providers will give you the ability to invest your funds in stocks, bonds, mutual funds, and other investments. There is risk involved in these investments. But any gains in your self-directed HSA will still receive the favorable tax treatment, as long as the money is left in your HSA. 
4. Save receipts and track expenses.
   Keep track of your medical expenses and save receipts. If you are ever audited, you will have a paper record to justify your tax-free HSA withdrawals.  
5. Shop around for a high-interest HSA account.
   Some HSA providers offer interest rates that are higher than the national average. Shopping around for a high-interest HSA account can help you earn more on your HSA funds.
6. Consider an HSA rollover.
   If you have an HSA with a provider that charges high fees or offers limited investment options, you may consider rolling over your HSA to another provider that better suits your needs. However, be sure to check for any potential fees with the new provider.

Paying for Medical Treatment with an HSA

With an HSA, you can allocate pre-tax funds towards eligible medical expenses. By doing so, you can lower your out-of-pocket costs and also decrease your income tax.

Any expense that is incurred for the purpose of treating or preventing a particular medical condition would be considered a qualified medical expense.

 Some examples of HSA-eligible medical expenses include:

You can consult IRS Publication 502 to get some more examples of expenses the IRS considers to be medical expenses, but note that it is not all-inclusive. 

Remember, you can use your HSA to pay for virtually any expense if it is for the treatment or prevention of a medical condition.

What are the Most Common Mistakes People Make with? 

Here are some of the most common mistakes people make with health savings accounts, and how to avoid them.

1. Not contributing enough.
   One of the biggest mistakes people make with HSAs is not contributing enough money to the account. HSAs are a tax-advantaged way to save money on healthcare expenses, so it’s important to contribute as much as possible to take full advantage of the tax benefits.
2. Not understanding the rules.
   Another common mistake is not fully understanding the rules surrounding HSAs. For example, there are limits on how much you can contribute each year, and there are restrictions on how the money can be used. It’s important to read the fine print and understand the rules before opening an HSA.
   
3. Using the funds for non-qualified expenses.
   HSAs are meant to be used for qualified medical expenses, such as deductibles, copayments, and prescriptions. However, some people make the mistake of using the funds for non-qualified expenses, such as elective cosmetic procedures or gym memberships, or for chiropractic care for general wellness purposes, rather than for the purposes of treating a specific diagnosed medical condition. If you use the funds for non-qualified expenses, you will have to pay taxes and a 20% penalty on the amount.
4. Not keeping receipts.
   It’s important to keep receipts for all qualified medical expenses paid out of an HSA. This is because you may need to provide proof of the expense in the future if the IRS audits your HSA. Not keeping receipts can make it difficult to prove that the expense was qualified.
   
5. Forgetting to reimburse yourself.
   Another mistake people make is forgetting to reimburse themselves for qualified medical expenses. Even if you don’t need the money right away, it’s important to reimburse yourself for any qualified expenses you’ve paid for out of pocket. This will ensure that the funds are used appropriately and that you don’t miss out on any tax benefits.