Do you sometimes wonder what a qualified medical expense is as defined by your HSA? You can spend your dollars on many healthcare products and services in addition to your deductible, copays, coinsurance, and prescriptions under Publication 502.

Medical, dental, and vision benefits are qualified benefits. The general guidance is, that if the service is covered under one of these plans any cost share not covered by the plan can be paid for with an HSA. For example, if you (or your dependents) need braces, and only $2000 is covered under the dental plan, the remaining $3000 can be paid with your HSA, if your dental plan doesn’t cover orthodontia, you can use your HSA for the entire billed amount.

Approved HSA expenses:

  1. Acupuncture
  2. Artificial Limb or teeth
  3. Bandages but only if they are for post-care. You can’t just purchase band-aids.
  4. Birth control pills or other forms of contraception including sterilization and vasectomy.
  5. Having special medical equipment installed in your home or your car for yourself, your spouse, or dependents because of a diagnosed disability condition. There is a capital expense form that you’ll need to complete.
  6. Braille books (the cost difference of “regular” vs the braille version)
  7. Fertility treatment including in vitro fertilization.
  8. Guide or service animals due to a diagnosed disability.
  9. Medicare premiums for Part A, B, and D (not C) as well as Long Term Care.
  10. Lead-based paint removal if a dependent had or has lead poisoning.
  11. Medical expenses such as meals and lodging while at the hospital for treatment.
  12. Mental Health and Substance Abuse treatments, facilities, or services.
  13. Transportation (bus, taxi, train, or plane) that assists you with getting to a medically related appointment.
  14. Weight-loss program fees and activities (no gym memberships or spas) if you have a diagnosable condition.
  15. Menstrual products.
  16. Over-the-counter medications even if not suggested by your doctor.

You may wonder on the contrary, what specifically is not a qualified medical expense. Most HSA cards are savvy enough to decline nonqualified medical expenses such as a candy bar, or toothpaste but should a non-qualified expense make it through you will need to correct the error. As long as you repay your HSA account within the impacted tax year, you can avoid the 20% penalty.

Non-approved HSA expenses:

  1. Any controlled substances such as marijuana even if your state law allows for purchase and consumption based on your disability.
  2. Cosmetic surgery (voluntary) unless it is related to a disease.
  3. Medications from other countries except for whatever portion is approved by the FDA.
  4. Teeth whitening
  5. Veterinary fees for your guide or service animal.

These lists are not all-inclusive, please visit the IRS link for all details. Publication 502 (2023), Medical and Dental Expenses | Internal Revenue Service (irs.gov)