Medical expenses you can pay for with HSA funds

An HSA covers most things a doctor bills you for: office visits, lab work, imaging, surgery, dental work, vision care, mental health treatment, and prescription drugs. You can use HSA money to pay your deductible, copays, and coinsurance. You can also use it to pay for medical equipment like crutches, wheelchairs, hearing aids, and blood pressure monitors—even if your insurance doesn't cover them.

The IRS publishes a list of what counts as a medical expense, and it is longer than most people expect. It includes things like acupuncture, chiropractic care, physical therapy, and fertility treatment. It covers over-the-counter medications if you have a prescription for them (a doctor's note counts; you do not need a filled prescription). Insulin and other diabetes supplies do not need a prescription at all.

What you cannot use HSA money for: cosmetic procedures, gym memberships, vitamins (unless prescribed for a diagnosed deficiency), toothpaste, sunscreen, and most over-the-counter items without a prescription. If you are unsure whether something counts, ask your HSA administrator or check IRS Publication 502, which lists the full rules.

Key Takeaways

  • HSA funds pay for deductibles, copays, coinsurance, prescriptions, and most medical services a doctor provides.
  • Over-the-counter medications and medical equipment count only if you have a doctor's prescription or written order.
  • Cosmetic procedures, gym memberships, and general wellness items like vitamins do not count unless prescribed for a specific medical condition.
  • You can use HSA money to pay for your spouse's and dependents' medical expenses, even if they are not on your health plan.
  • After age 65, you can withdraw HSA money for any reason without penalty, though non-medical withdrawals are taxed as income.

Dental and vision care covered by HSA

Dental work is a major HSA use. You can pay for cleanings, fillings, root canals, crowns, extractions, and orthodontics—braces for yourself or your children. You can also pay for dental implants and dentures. Vision care includes eye exams, glasses, contact lenses, and laser eye surgery like LASIK. If your dental or vision insurance has a deductible or annual maximum, your HSA covers what insurance does not pay.

Many people do not realize they can use HSA money for preventive dental and vision care even when their medical insurance covers it. If your plan covers a cleaning or eye exam at no cost, you still have the option to pay out of pocket with HSA funds and keep the money in your account invested for later use.

Mental health and therapy expenses

Therapy, counseling, and psychiatric care all count as HSA-may be able to access expenses. You can pay for sessions with a therapist, psychologist, or psychiatrist. You can also use HSA money for inpatient mental health treatment, rehabilitation programs, and medications prescribed for mental health conditions. If your insurance requires a copay or has a deductible for mental health visits, your HSA covers that cost.

Some people use HSA funds to pay for therapy out of pocket to keep the expense private or to see a therapist their insurance does not cover. Since HSA withdrawals for medical expenses are not reported to your employer or insurance company, this is a way to access care without leaving a trail through your benefits system.

Family members and dependents you can cover

You can use your HSA to pay medical expenses for your spouse and any dependent you claim on your tax return, even if they are not covered by your health plan. This is useful if your spouse has their own insurance or if a dependent is on a parent's plan. You can also pay for an adult child's medical expenses if you claim them as a dependent, though the IRS rules on this are strict—they must live with you and meet income limits.

You cannot use HSA money to pay for a parent's medical expenses unless you claim them as a dependent on your tax return and they meet the IRS definition of a may have access to dependent. The same rule applies to siblings, in-laws, and other relatives.

Long-term care and nursing home costs

HSA funds can pay for long-term care insurance premiums and some long-term care services. If you are in a nursing home, assisted living facility, or receiving home health care for a chronic condition, you may be able to use HSA money to cover those costs. The rules are specific: the care must be medically necessary, and you must have a doctor's order or assessment saying so.

Long-term care insurance premiums are HSA-may be able to access up to an annual limit that changes each year based on your age. In 2024, the limit ranges from $450 for someone age 40 or younger to $3,000 for someone age 60 or older. Check with your HSA administrator for the current year's limits.

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

If you withdraw HSA money and use it for something that does not count as a medical expense, you owe income tax on that amount plus a 20 percent penalty—unless you are age 65 or older. After 65, you can withdraw money for any reason without the penalty, though you still owe income tax on non-medical withdrawals. This makes an HSA a useful retirement savings tool if you do not spend all the money on medical care.

Keep receipts for all HSA withdrawals. The IRS does not require you to submit them when you file taxes, but if you are audited, you need proof that the money went to a medical expense. If you cannot show that a withdrawal was medical, the IRS will assess the penalty and back taxes.

HSA withdrawals and reimbursement timing

You can withdraw HSA money anytime you have a medical expense, but you do not have to withdraw it right away. Some people pay medical bills out of pocket and save the receipts, then reimburse themselves from the HSA months or years later. This strategy lets the HSA balance grow and earn interest or investment returns while you cover expenses with other money.

There is no time limit on when you can reimburse yourself for a past medical expense, as long as the expense happened after you opened the HSA. You can also use HSA money to pay a medical bill directly to the provider. Most HSA administrators issue a debit card that works like a credit card at pharmacies and medical offices.

Frequently Asked Questions

Can I use my HSA to pay for my spouse's medical expenses if they have their own insurance?

Yes. You can use your HSA to pay for your spouse's medical expenses regardless of whether they have insurance, are on a different plan, or are uninsured. The same applies to any dependent you claim on your tax return.

Do I need a prescription to buy over-the-counter pain relievers or cold medicine with HSA money?

Yes, as of 2020. Over-the-counter medications require a prescription or a doctor's written order to be HSA-may be able to access. Insulin is the exception—it does not require a prescription. Ask your doctor for a prescription if you use OTC medications regularly.

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

If you use the card at a pharmacy or medical office, the transaction is assumed to be medical. If you use it at a general retailer like a grocery store or drugstore, you may need to provide documentation that the purchase was medical. Keep receipts to prove what you bought.

Can I use HSA money to pay for my child's braces?

Yes, if you claim the child as a dependent on your tax return. Orthodontics, including braces, is an HSA-may be able to access expense. You can use the HSA to pay the orthodontist directly or reimburse yourself after paying out of pocket.

What happens to my HSA money if I do not use it by the end of the year?

HSA money rolls over year to year—there is no "use it or lose it" rule like there is with flexible spending accounts. The money stays in your account and can be invested. You can use it for medical expenses whenever they occur, even years later.