What an HSA can cover

Your Health Savings Account can pay for medical expenses that the IRS defines as may have access to medical expenses. These are costs related to diagnosing, treating, or managing a health condition — not wellness or prevention alone. The IRS publishes a list of what counts, and it is longer than most people expect.

may have access to expenses include doctor visits, hospital stays, prescription medications, dental work, vision care, mental health treatment, and medical equipment like wheelchairs or hearing aids. You can also use HSA funds for physical therapy, chiropractic care, acupuncture, and lab tests. Costs for surgery, anesthesia, X-rays, and imaging all count. If your doctor prescribes it to treat or manage a diagnosed condition, it is almost certainly covered.

The key word is treatment. Your HSA can pay for the insulin you need because you have diabetes, but not for a gym membership to prevent diabetes. It covers the cost of glasses because you need them to see, but not for cosmetic contact lenses. It pays for a prescription sleep aid, but not for a mattress marketed as better sleep.

Key Takeaways

  • may have access to medical expenses are those used to diagnose, treat, or manage a health condition — not to prevent illness in a generally healthy person.
  • Doctor visits, prescriptions, dental work, vision care, mental health treatment, and medical equipment all count if they treat a diagnosed condition.
  • Over-the-counter medications and supplies count only if you have a prescription or a doctor's letter stating medical necessity.
  • Cosmetic procedures, gym memberships, vitamins, and general wellness products do not count, even if they improve your health.
  • You can use HSA funds to pay a family member for care they provide, but only if they are not your dependent and you pay fair market rates.

Over-the-counter medications and supplies

Over-the-counter drugs and medical supplies have stricter rules than prescription items. You can use your HSA to buy over-the-counter pain relievers, allergy medications, antacids, and cold medicine — but only if you have a prescription from your doctor or a written letter from your doctor stating that the item is medically necessary for your condition.

Without that documentation, over-the-counter items do not count. This rule changed in 2020. Before that, you could buy them with HSA funds without a prescription. Now the IRS requires proof that a doctor ordered or approved the purchase. Keep the prescription or letter with your receipt in case you are audited.

Medical supplies like bandages, thermometers, blood pressure monitors, and glucose test strips follow the same rule. If your doctor prescribes them or writes that you need them, they count. If you buy them on your own, they do not.

Dental and vision expenses

Dental work counts as a may have access to expense when it treats a tooth or gum problem. Fillings, root canals, extractions, crowns, and periodontal treatment all may have access to. Orthodontics — braces and aligners — also counts because it treats a bite or alignment problem, not just cosmetic appearance.

Teeth cleaning and routine exams count because they detect and prevent disease. Whitening and cosmetic bonding do not, because they are purely cosmetic. If your dentist charges one bill for a cleaning plus whitening, ask them to separate the charges so you can pay only for the cleaning with your HSA.

Vision expenses include eye exams, glasses, contact lenses, and surgery to correct vision problems like LASIK. The cost of the exam, the frames, the lenses, and the fitting all count. Sunglasses do not, even if they have a prescription, because they are not correcting a vision defect — they are protecting from light.

Mental health and therapy

Therapy and counseling for a diagnosed mental health condition are may have access to expenses. This includes sessions with a psychiatrist, psychologist, licensed counselor, or social worker. The cost of the session itself counts, as does any medication prescribed to treat depression, anxiety, bipolar disorder, or other conditions.

The therapist does not have to be in your insurance network. You can use HSA funds to pay an out-of-network provider directly. Keep receipts and any documentation showing the provider's credentials and your diagnosis, in case the IRS asks.

Wellness coaching, life coaching, or general counseling for stress management does not count unless it is part of treatment for a diagnosed condition. If you see a therapist because your doctor referred you for depression, it counts. If you see a life coach to improve your career, it does not.

Medical equipment and devices

Durable medical equipment — items that last more than a year and treat a medical condition — counts as a may have access to expense. Wheelchairs, walkers, canes, crutches, hearing aids, and oxygen equipment all may have access to. Diabetic supplies like glucose monitors and lancets count. Continuous positive airway pressure (CPAP) machines for sleep apnea count.

The equipment must be prescribed or recommended by a doctor to treat your condition. You cannot buy a back brace on your own and use HSA funds; your doctor has to say you need it. Once you have that documentation, the full cost — including fitting and adjustment — is covered.

Home modifications that are medically necessary also count. If your doctor says you need a grab bar because of a balance disorder, or a ramp because you use a wheelchair, the cost of installation is a may have access to expense. The modification has to be primarily medical, not general home improvement.

What does not count

Cosmetic procedures do not count unless they are reconstructive — meaning they repair damage from injury, disease, or surgery. Botox, facelifts, and teeth whitening do not count. Breast augmentation does not count. But reconstructive surgery after a mastectomy, or repair of a broken nose, does count.

General wellness products and services do not count. Gym memberships, fitness classes, vitamins, supplements, and weight loss programs do not may have access to, even if your doctor recommends them for your health. Maternity clothes, diapers, and baby formula do not count. Toiletries and cosmetics do not count, even if they treat a skin condition — unless your doctor prescribes a specific medicated product.

Insurance premiums do not count, with narrow exceptions. You cannot use HSA funds to pay your regular health insurance premium. You can use them to pay premiums for long-term care insurance, or for health insurance while you are receiving unemployment benefits. You can also use them to pay Medicare premiums once you turn 65.

Paying family members and caregivers

You can use HSA funds to pay a family member for care they provide — but only if they are not your dependent for tax purposes. If you claim your adult child or parent as a dependent, you cannot pay them with HSA funds. If they are not your dependent, you can pay them fair market rates for caregiving, nursing, or assistance with medical needs.

Keep records showing what services were provided, the dates, the hours, and the rate paid. The IRS may ask for this documentation if you are audited. Fair market rate means what you would pay a stranger for the same work in your area — not a discount because they are family.

Frequently Asked Questions

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

Yes. Your HSA can pay for may have access to medical expenses for you, your spouse, and any dependent children or relatives — even if they are not covered by your health insurance plan. You do not have to be on the same insurance to use HSA funds for their care.

Does my doctor have to write a prescription for over-the-counter medicine?

Not a full prescription, but you need written documentation. Your doctor can write a letter stating that you need a specific over-the-counter item for your condition. Many doctors will do this quickly if you ask. Keep the letter with your receipt.

Can I use my HSA for my pet's veterinary bills?

No. Veterinary expenses do not count as may have access to medical expenses, even if the pet is a service animal. Service animals themselves do not count, though the cost of training a guide dog for a blind person may count in some cases — check with your HSA administrator.

What happens if I use my HSA for something that does not count?

You will owe income tax on that amount, plus a 20 percent penalty. The penalty applies only to non-may have access to expenses; may have access to expenses are never taxed. Keep receipts for everything you pay with your HSA so you can prove it was may have access to if audited.

Can I use my HSA to pay for a procedure my insurance does not cover?

Yes, as long as it is a may have access to medical expense. Your HSA can pay for treatments, medications, or equipment that your insurance denies or does not cover. The IRS rules, not your insurance company, determine what counts.