What You Can Spend HSA Money On

HSA funds cover medical expenses that your health insurance does not pay

A Health Savings Account (HSA) holds money you set aside to pay for medical costs. You can withdraw that money tax-free to cover may have access to medical expenses — the IRS publishes a list of what counts. The key rule: the expense must be for diagnosis, treatment, or prevention of a disease or condition, and it cannot be something your health insurance already covers in full.

What qualifies is narrower than "anything health-related." You cannot use HSA funds for cosmetic procedures, gym memberships, or over-the-counter vitamins unless a doctor prescribes them. You also cannot use the money for health insurance premiums, with a few exceptions. Understanding the boundary between what counts and what does not matters because withdrawing money for non-may have access to expenses triggers taxes and a 20 percent penalty.

Key Takeaways

• may have access to medical expenses include copays, deductibles, prescription drugs, dental work, vision care, and medical equipment like crutches or wheelchairs.
• Over-the-counter medicines and supplies count only if a doctor writes a prescription for them, not if you buy them on your own.
• You cannot use HSA funds for health insurance premiums, except for COBRA continuation coverage, long-term care insurance, or premiums while you receive unemployment benefits.
• Withdrawals for non-may have access to expenses are taxed as income plus subject to a 20 percent penalty, so keeping receipts and tracking what you spend matters.
• Mental health treatment, physical therapy, and prescription eyeglasses all count as may have access to expenses.

Medical services and procedures covered by HSA funds

You can use HSA money for any doctor visit, specialist appointment, or hospital stay that your insurance does not fully cover. This includes the copay you hand over at the front desk, the coinsurance you owe after insurance pays its share, and any deductible you have not yet met. If your plan requires you to pay $50 to see a primary care doctor, that $50 comes from your HSA.

Surgical procedures, emergency room visits, urgent care, and mental health counseling or therapy all count. Physical therapy, occupational therapy, and chiropractic care are may have access to expenses if a doctor orders them. Dental work — fillings, root canals, crowns, extractions — qualifies. So does orthodontia like braces. Vision care including eye exams, glasses, contact lenses, and laser eye surgery (LASIK) all count as may have access to expenses.

Prescription medications are always may have access to, whether they treat a chronic condition or a short-term illness. Over-the-counter drugs like aspirin, cold medicine, or antacids do not count unless a doctor writes a prescription for them specifically. The prescription itself — the piece of paper or electronic order from your doctor — is what makes the difference.

Medical equipment and supplies you can purchase with HSA funds

Medical equipment that treats a condition counts as a may have access to expense. Crutches, wheelchairs, walkers, canes, and hearing aids all may have access to. Diabetic testing supplies — glucose meters, test strips, lancets — are may have access to. Bandages, elastic wraps, and other wound care supplies count. Blood pressure monitors, thermometers, and pulse oximeters are may have access to medical equipment.

Eyeglasses and contact lenses, including the solution and cases, are may have access to. Prescription orthotics (shoe inserts) count. Braces for joints or back support count if prescribed by a doctor. Continuous positive airway pressure (CPAP) machines and supplies for sleep apnea treatment are may have access to. Pregnancy test kits and ovulation predictor kits count as may have access to medical supplies.

The rule is that the item must be primarily medical in purpose and not something a healthy person would use. A regular thermometer counts; a fancy wellness thermometer marketed as a lifestyle device does not. A doctor's prescription or written order strengthens your case if you are unsure whether something qualifies.

Insurance premiums and what HSA funds cannot cover

You cannot use HSA funds to pay regular health insurance premiums — the monthly or annual cost of your plan. This is the most common misunderstanding about HSAs. However, three exceptions exist: you can use HSA funds to pay for COBRA continuation coverage (the temporary health insurance you can buy if you leave a job), long-term care insurance premiums, and health insurance premiums while you are receiving unemployment benefits.

Medicare premiums are also an exception. Once you turn 65 and enroll in Medicare, you can use HSA funds to pay Medicare Part B premiums (doctor and outpatient services), Medicare Part D premiums (prescription drugs), and Medicare Advantage premiums. You can also use HSA funds to pay for supplemental (Medigap) insurance that covers costs Medicare does not.

You cannot use HSA funds for life insurance, disability insurance, or any insurance that is not health-related. You cannot use the money for cosmetic procedures like teeth whitening, Botox, or hair removal unless they are medically necessary (for example, a dermatologist treating a skin condition). You cannot use HSA funds for gym memberships, weight loss programs, or general wellness services that are not prescribed to treat a specific condition.

Over-the-counter items and the prescription requirement

The rule changed in 2020: over-the-counter medicines and medical supplies now require a doctor's prescription to be may have access to HSA expenses. Before 2020, you could buy them without a prescription. Now, if you want to use HSA funds for an over-the-counter pain reliever, allergy medicine, heartburn medication, or cold remedy, your doctor must write a prescription for it.

This applies to items like bandages, elastic wraps, heating pads, and ice packs too. If a doctor prescribes them, they count. If you buy them on your own, they do not. The prescription does not have to be written on paper — it can be electronic, and many doctors will write one if you ask. Some pharmacies can also convert a verbal authorization from your doctor into a prescription.

Keep the prescription with your receipt. If you withdraw HSA funds for an over-the-counter item and the IRS questions it later, you will need proof that a doctor prescribed it. The same documentation rule applies to all may have access to expenses: save your receipts and any medical records that show the expense was for a may have access to condition.

Dependent care and other non-medical uses

HSA funds cannot be used for dependent care, childcare, or elder care, even if you need it because of a medical condition. These expenses are covered by a different account type — a Dependent Care FSA (Flexible Spending Account) — not an HSA. If you have both accounts, keep them separate.

You cannot use HSA funds for education expenses, even if the education is health-related (like nursing school). You cannot use the money for travel to a medical appointment, lodging near a hospital, or meals while you are receiving treatment. Some employers offer travel reimbursement for medical tourism or out-of-state treatment, but that comes from a separate benefit, not your HSA.

You cannot use HSA funds for supplements, vitamins, or herbal products unless a doctor prescribes them for a specific medical condition. A multivitamin you take for general wellness does not count. A prescription vitamin D supplement for a diagnosed deficiency does count. The prescription is what makes the difference.

How to track and document may have access to expenses

Keep receipts for every HSA withdrawal. The IRS does not require you to submit receipts when you withdraw money, but you must be able to prove the expense was may have access to if you are audited. A receipt should show the date, the provider or store, what was purchased, and the amount paid.

For medical services, your explanation of benefits (EOB) from your insurance company serves as documentation. For prescriptions, the pharmacy receipt shows the drug name and that it was prescribed. For medical equipment, the receipt should identify it as medical equipment. If you are unsure whether something qualifies, ask your HSA administrator or your tax preparer before you withdraw the money.

If you withdraw HSA funds for a non-may have access to expense, you owe income tax on that amount plus a 20 percent penalty. For example, if you withdraw $500 for a non-may have access to expense and you are in the 22 percent tax bracket, you owe $110 in taxes plus $100 in penalty — a total of $210 on top of the $500 you spent. Tracking what you spend prevents this mistake.

Frequently Asked Questions

Can I use HSA funds for my spouse's or child's medical expenses?

Yes. HSA funds can cover may have access to medical expenses for you, your spouse, and any dependent you claim on your tax return, even if they are not covered by your health insurance plan. You do not have to be enrolled in the same health plan as your family members for their expenses to count.

What happens if I use HSA funds for something that is not may have access to?

The withdrawal is taxed as ordinary income, and you pay an additional 20 percent penalty on that amount. For example, a $200 non-may have access to withdrawal costs you $200 plus taxes and a $40 penalty. After age 65, the income tax still applies to non-may have access to withdrawals, but the 20 percent penalty goes away.

Do I need a prescription for every over-the-counter medicine?

Yes, as of 2020. Over-the-counter medicines and medical supplies require a doctor's prescription to be may have access to HSA expenses. Ask your doctor to write a prescription if you plan to use HSA funds. Many doctors will do this without an office visit.

Can I use HSA funds to pay my health insurance deductible?

Yes. Your deductible is a may have access to medical expense. When you owe your deductible to your doctor or hospital, you can use HSA funds to pay it. You can also use HSA funds to pay copays and coinsurance.

Are fertility treatments and pregnancy-related expenses covered?

Yes. Fertility treatments, pregnancy tests, prenatal care, delivery, and postpartum care are all may have access to medical expenses. Contraception and birth control are also may have access to. Adoption expenses are not covered by HSA funds.