HSA Qualified Expenses

Spend Your Tax-Free Dollars Wisely


If you have taken the first step and started contributing tax-free money to your health savings account to save for future medical expenses, you’re likely wondering – what next?

In order for your funds to remain tax-free, you have to spend them according to the IRS tax code.  This means you should only use HSA funds for qualified medical expenses.

In addition to being able to withdraw your money tax free to cover these types of expenses (which might otherwise be covered by a traditional low-deductible high-premium policy), you can use your HSA health plans account to cover other costs that would not normally be covered by a health insurance policy.

These include:

Dental expenses

preventive health program

Dental expenses.  Individuals can typically only purchase dental discount plans, or fairly expensive dental policies with a limited choice of dentists.  Coverage for braces is normally very limited.  However, any of these medically necessary procedures can be paid for from your HSA account.

Charges incurred as part of a preventive health program.  This could include vaccines, blood tests, metabolism tests, and other lab tests, and even fees paid to a health institute or vitamins if prescribed by a doctor.

Special fees incurred by handicapped individuals, including wheelchairs, telephone or TV equipment to assist the hard-of-hearing, the cost and care of guide dogs, or special school costs for the handicapped.

Alternative treatments

Transportation and lodging expenses

Mental therapy

Alternative treatments.  This could include acupuncture, Ayurvedic Medicine, aromatherapy, homeopathy, Traditional Chinese Medicine (TCM), nutritional consulting, or even healing services provided by a Christian Science Practitioner or other type healer.

Transportation and lodging expenses, when related to health care

Mental therapy.  This includes the charges of psychiatrists, psychologists, psychoanalysts, and psychotherapists

Physical therapy

Maternity expenses

Insurance premiums 

Physical therapy.  This could include hydrotherapy, chiropractor services, or medical massage therapy

Maternity expenses that are not covered by your health insurance policy.

Insurance premiums to pay for qualified long-term care (See our Long Term Care page for more information.)

Also note that your HSA health plans account can be used to pay these expenses for any spouse or dependent member of the family including same sex and domestic partners, even if they are not covered under the insurance policy.

View Entire List of HSA Qualified Expenses

HSA Qualified Expenses List

Acupuncture Limbs – artificial
Alcoholism – treatment Lodging (treatment related, and with restrictions, up to $50 per person)
Ambulance – hire Long-Term Care
Autoette or Wheelchair Mattress – prescribed for alleviation of arthritis
Birth Control Pills Medical conference fees (relating to chronic illness; no lodging or meals)
Blind Persons Services Medicare Parts A and B
Braces Membership Fees – association furnishing medical services, hospitalization, and clinical care
Capital Expenditures – home modifications for handicapped – primary purpose must be medical care Nursing Home – medical reasons
Car Equipment – to accommodate wheelchair and/or handicapped controls Nursing Services – board and Social Security paid by taxpayers
Childbirth Preparation Classes – mother Nutritional Supplements (by prescription)
Chiropractors Obstetrical Expenses
Christian Science Treatment Operations – legal
Contact Lenses – replacement insurance Optometrists
Crutches Orthodontia
Deaf Persons – hearing aid and batteries, hearing aid animal and care, lip reading expenses, special education, modified telephone Orthopedic Shoes – excess costs
Dental Fees – see Dental Plans Oxygen / Oxygen Equipment
Dentures Prosthesis
Diagnostic Fees Psychiatric Care
Diapers (adult disposable) – used due to severe neurological disease Psychologists
Doctor’s Fees Psychotherapists
Domestic Aid – rendered by a nurse Reclining Chair – for cardiac patients
Drug Addiction Recovery Remedial Reading
Drugs – prescription or over-the-counter Retirement Home lifetime medical care
Dyslexia Language Training Sanitarium Rest Home – medical, educational, rehabilitative services
Elevator for Alleviation of Cardiac Condition Schools – special, relief, or handicapped
Eyeglasses and Examination Fees Sexual Dysfunction Treatment
Fluoride Device – on advice of a dentist Sterilization
Halfway House – adjustment to mental hospital Surgical Fees
Healing Services Fees Swimming Pool – treatment of polio or arthritis
Health Maintenance Organizations Teeth – artificial
Hearing Aids Television – closed-caption decoder
Hospital Care Therapy Treatments – prescribed by a physician
Insulin Transportation – essentially and primarily for medical care
Laboratory Fees – lab discounts Weight Loss Programs – as a treatment for the disease of obesity
Laetrile – by prescription Wheelchair or Autoette
Lazer eye surgery X-rays
Lead Paint Removal Mileage
Legal Expenses – authorizing treatment of mental illness Stop smoking programs
Lifetime Medical Care – prepaid; retirement home Vasectomy
Vision correction

Are There Penalties for Non-qualified HSA Expenses?

It can be tempting to withdraw funds from your HSA for purposes other than qualified expenses.  If you take this route, be prepared for a large tax bill.  All funds withdrawn for non-qualifying expenses before the age of 65 are subject to taxes, plus a 20% tax penalty.

Once you turn 65, you may withdraw funds for any reason.  Funds used for qualified medical expenses remain tax-free.  Funds use for any other reason are taxed as retirement income.

View Entire List of Non-Qualified HSA Expenses

Non-Qualified HSA Expenses List

Advance payment for services to be rendered next year Illegally produced drugs  
Athletic club membership Maternity clothes  
Automobile insurance premium allocable to medical coverage  Premiums for health insurance, other than COBRA 
Boarding school fees  Scientology counseling  
Commuting expenses of a disabled person  Special foods or beverages  
Cosmetic surgery and procedures  Specially designed car for the handicapped other than an autonette or special equipment  
Cosmetics, hygiene products and similar items  Travel for general health improvement 
Health programs offered by resort hotels, health clubs, and gyms    Tuition and travel expenses for a problem child to a particular school   
Illegal operations and treatments     Weight loss programs (unless it is a treatment for a specific disease, such as obesity or cardiovascular disease, diagnosed by your physician) 

Am I Required to Use My HSA Funds by a Certain Time?

No – there is nothing on the books that requires you to use the money in your HSA at all.  Any money left in your HSA at the end of the year continues to roll over and continue earning interest.  If you choose to pay out of pocket for medical expenses without making a withdrawal from your HSA, that is perfectly fine.  Your money will continue to grow tax-free.

You can reimburse yourself at any time for qualified expenses.  Some prefer to do this once a year while others prefer to do this after each incurred expense.  You can choose not to use your HSA at all, which makes for a nice retirement fund in the future.

Want to know more about how you can benefit from a Health Savings Plan? 

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Health insurance plans that are HSA qualified can be viewed in our health insurance instant quote results. HSA-qualified plans will have a blue HSA symbol.
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Health sharing plans are not insurance but a more affordable way to make sure your family is protected from unexpected medical expenses. Health sharing means that the group is helping to cover each other's medical bills.
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