No—an HSA is not a general spending account, but the list of what qualifies is longer than most people think

A Health Savings Account lets you set aside pre-tax money for medical costs, but you cannot use it for groceries, gym memberships, or rent. The IRS maintains a specific list of may have access to medical expenses, and if you spend HSA money on something not on that list, you owe income tax on the withdrawal plus a 20 percent penalty—unless you are 65 or older, in which case you owe only the income tax.

The may have access to list is wider than many people realize. It covers not just doctor visits and prescriptions, but also dental work, vision care, mental health treatment, medical equipment, and even some over-the-counter items. The catch is that the IRS rules are strict about what counts, and the rules changed in 2023 to include some items that were previously banned.

Key Takeaways

  • may have access to medical expenses include doctor visits, prescriptions, dental and vision care, mental health treatment, and certain medical equipment—but not cosmetic procedures or general wellness items.
  • Over-the-counter medications and supplies now count without a prescription, but only if they treat a diagnosed condition, not prevent illness.
  • You cannot use HSA funds for health insurance premiums (except COBRA and long-term care insurance), gym memberships, or cosmetic procedures.
  • If you withdraw money for a non-may have access to expense before age 65, you pay income tax plus a 20 percent penalty; after 65, you pay only income tax.
  • Keep receipts and documentation for every HSA purchase, because the IRS can audit your account and demand repayment if you cannot prove an expense was may have access to.

What counts as a may have access to medical expense

may have access to expenses fall into several categories. Doctor and hospital care includes office visits, surgery, lab tests, X-rays, and emergency room visits. Prescription medications are always may have access to. Dental care covers cleanings, fillings, root canals, orthodontia, and dentures. Vision care includes eye exams, glasses, contact lenses, and laser eye surgery.

Mental health and substance abuse treatment counts, including therapy, psychiatry, and inpatient rehab. Medical equipment and supplies include crutches, wheelchairs, hearing aids, glucose monitors, blood pressure cuffs, and bandages. Over-the-counter medications now count without a prescription if they treat a diagnosed condition—this changed in 2023 and includes pain relievers, allergy medicine, cold medicine, and antacids.

Less obvious may have access to expenses include physical therapy, chiropractic care, acupuncture, fertility treatment, and birth control. Nursing home care counts if it is primarily for medical care, not just room and board. You can also use HSA funds to pay for a trained guide dog or service animal if it is prescribed by a doctor to treat a medical condition.

What does not count, even if it seems medical

Cosmetic procedures are never may have access to, even if they improve your appearance after an injury or illness. Botox, teeth whitening, and hair transplants do not count. The exception is if a procedure is medically necessary—for example, reconstructive surgery after an accident or burn.

General wellness and prevention do not count. This means gym memberships, fitness classes, diet programs, and vitamins do not may have access to, even if your doctor recommends them. Sunscreen and insect repellent are not may have access to. Over-the-counter items that prevent illness (rather than treat a diagnosed condition) are not covered.

Health insurance premiums are generally not may have access to, with narrow exceptions. You cannot use HSA funds to pay premiums for your regular health insurance, Medicare, or supplemental insurance. You can, however, use HSA funds to pay COBRA premiums (the temporary coverage you get after leaving a job) and long-term care insurance premiums. You also cannot use HSA funds to pay for short-term health insurance.

Other non-may have access to expenses include maternity clothes, baby formula, childcare, household help, travel for medical reasons, and sex change operations (though hormone therapy and related medical care may count). Marijuana, even in states where it is legal, is not may have access to because it remains illegal under federal law.

How to document your purchases and avoid penalties

The IRS does not require you to submit receipts when you make an HSA withdrawal, but you must keep them. If the IRS audits your account—which can happen years later—you need to prove that every dollar you withdrew was spent on a may have access to expense. Without documentation, you will owe income tax and the 20 percent penalty on the full amount.

Keep the receipt, invoice, or explanation of benefits for every purchase. For prescriptions, the pharmacy receipt is enough. For doctor visits, keep the bill or the explanation of benefits from your insurance. For over-the-counter items, keep the receipt showing what you bought. If you are reimbursing yourself for an expense you paid out of pocket months or years ago, keep the original receipt and a note showing the date you withdrew the HSA funds.

Some HSA providers offer a debit card that you can use at pharmacies and medical providers. Even with a debit card, keep receipts. The card does not automatically verify that a purchase is may have access to—it just makes the withdrawal easier. A pharmacy might sell both may have access to items (bandages) and non-may have access to items (shampoo) in the same transaction, so you need the receipt to prove you bought only the may have access to one.

Using HSA funds after age 65

At age 65, the rules change. You can withdraw HSA money for any reason without the 20 percent penalty. You will still owe income tax on non-medical withdrawals, but the penalty goes away. This means an HSA becomes similar to a traditional IRA at 65—you can use it for medical expenses tax-free, or for anything else and pay only income tax.

Many people use this feature to let their HSA grow untouched during their working years, then use it as a supplemental retirement account after 65. If you do withdraw for non-medical reasons before 65, you cannot later claim that expense as may have access to and avoid the penalty. The decision to withdraw is final.

Special situations: Medicare, Medicaid, and military coverage

If you are on Medicare, you can still use HSA funds for may have access to medical expenses that Medicare does not cover—such as dental, vision, and hearing care. You cannot use HSA funds to pay your Medicare premiums, with the exception of long-term care insurance premiums.

If you are on Medicaid, you can use HSA funds for may have access to expenses that Medicaid does not cover. If you are covered by TRICARE (military health insurance) or the Veterans Health Administration, the same rule applies: use HSA funds for may have access to expenses not covered by your military plan.

Frequently Asked Questions

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

Yes. As long as your spouse is your dependent for tax purposes, you can use your HSA to pay for their may have access to medical expenses. You do not need to be covered by the same health plan. Keep receipts showing your spouse's name and the date of service.

What if I use my HSA debit card at a store that sells both medical and non-medical items?

You are responsible for ensuring the purchase is may have access to. If you buy bandages and shampoo in the same transaction, you owe tax and penalty on the shampoo portion. Keep the receipt and be able to show which items were medical. Some HSA providers flag certain merchants as medical-only, but this is not foolproof.

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

Yes, if it is provided by a licensed mental health professional and you have a diagnosed condition. This includes therapy for depression, anxiety, PTSD, and substance abuse. Coaching or life counseling that is not treatment for a diagnosed condition does not count.

Do I have to spend my HSA money every year, or can I let it grow?

HSA funds roll over year to year with no "use it or lose it" deadline. You can let the money accumulate indefinitely. This is one reason HSAs are valuable—they function as a long-term savings account, unlike flexible spending accounts (FSAs), which have annual limits you must spend or forfeit.

What happens if I withdraw HSA money and later find out the expense was not may have access to?

You owe income tax on the withdrawal plus a 20 percent penalty (unless you are 65 or older, in which case you owe only income tax). You cannot undo the withdrawal. The penalty is calculated on the non-may have access to amount, so if you withdrew $500 for something that turned out not to count, you owe tax on $500 plus $100 in penalty.