10 Surprising HSA-Eligible Expenses You Didn’t Know About
Health Savings Accounts (HSAs) are well-known for covering common medical expenses like doctor visits and prescriptions. However, they can also be used for a variety of lesser-known healthcare-related costs. By understanding the full range of HSA-eligible expenses, you can maximize the benefits of your account and make the most of your tax-free dollars.
Here’s a breakdown of 10 surprising HSA-eligible expenses, why they qualify, and how to keep track of your receipts for reimbursement.
What Qualifies as an HSA-Eligible Expense?
HSA funds can be used to pay for qualified medical expenses as defined by the IRS. These expenses must be primarily for the prevention, diagnosis, or treatment of physical or mental illnesses. Over-the-counter items, certain alternative therapies, and even some travel-related costs for medical care can qualify.
Let’s dive into some of the unexpected items you might not know are covered.
1. Over-the-Counter Medications
Since the passage of the CARES Act in 2020, HSA funds can be used to purchase over-the-counter (OTC) medications without a prescription. Items like pain relievers, allergy medication, and cold remedies are all eligible.
Why They Qualify: These medications are directly related to treating or alleviating medical conditions.
Pro Tip: Keep your receipts from pharmacies or retailers for easy reimbursement or proof of purchase.
2. Menstrual Care Products
Feminine hygiene products, including tampons, pads, and menstrual cups, are now HSA-eligible expenses. This change also came with the CARES Act.
Why They Qualify: These items are considered necessary for health and wellness.
How to Track: Save receipts or invoices from your purchases, especially if buying online.
3. Sunscreen with SPF 15 or Higher
Purchasing sunscreen with an SPF of 15 or greater is an eligible expense. This includes both lotions and sprays, as long as they meet the SPF requirement.
Why They Qualify: Sunscreen is recognized as a preventive measure against skin cancer.
Pro Tip: Include the itemized receipt with your HSA records to avoid issues during audits.
4. Prescription Glasses and Contact Lenses
If you wear prescription glasses or contact lenses, these expenses, including accessories like cases and cleaning solutions, are HSA-eligible.
Why They Qualify: Vision correction is deemed a necessary medical expense.
How to Track: Retain receipts and any documentation from your optometrist.
5. Acupuncture
Acupuncture is an HSA-eligible expense as long as it’s used to treat a medical condition. Many people use it for pain relief, stress management, or other health concerns.
Why It Qualifies: It is considered a legitimate medical treatment when performed by a licensed practitioner.
Pro Tip: Request detailed invoices from your acupuncturist, including dates of service and descriptions of treatments.
6. Chiropractic Care
Visits to a chiropractor for adjustments or other treatments are eligible for HSA funds. This includes treatments for back pain, joint issues, and similar conditions.
Why It Qualifies: Chiropractic care is widely recognized as a form of medical treatment.
How to Track: Obtain itemized receipts that list the treatments provided.
7. Hearing Aids and Batteries
If you or a family member needs hearing aids, the devices and their batteries are HSA-eligible expenses. Regular maintenance and replacement costs are also covered.
Why They Qualify: Hearing aids are necessary for individuals with hearing impairments.
Pro Tip: Keep documentation from audiologists or hearing aid providers for your records.
8. Travel for Medical Care
Travel expenses related to medical care, such as mileage, parking fees, and public transportation costs, can be reimbursed with HSA funds. However, these expenses must be directly related to receiving treatment.
Why They Qualify: The IRS recognizes the importance of accessibility to healthcare services.
How to Track: Maintain detailed records, including dates, locations, and receipts for transportation and lodging (if applicable).
9. Sleep Studies
Sleep studies prescribed by a doctor to diagnose or treat conditions like sleep apnea are eligible. This includes any associated costs, such as equipment rental fees.
Why They Qualify: These tests are considered diagnostic tools for medical conditions.
Pro Tip: Ensure you have a doctor’s prescription or recommendation to justify the expense.
10. Breastfeeding Supplies
Supplies like breast pumps, milk storage bags, and nursing pads are HSA-eligible. These are particularly useful for new parents who need to manage feeding schedules.
Why They Qualify: These items are considered essential for maternal and infant health.
How to Track: Keep receipts and consider creating a digital file for easier management.
How to Track and Store Receipts
Proper documentation is key to avoiding any issues with the IRS or your HSA administrator. Follow these tips for staying organized:
- Use Digital Tools: Many HSA providers offer apps where you can upload receipts and track expenses.
- Keep Copies: Save both digital and physical copies of receipts in case you need to prove eligibility.
- Label Your Records: Clearly label receipts and invoices with the type of expense and date for easier retrieval.
- Audit Your Account: Periodically review your HSA account to ensure all expenses align with IRS guidelines.
FAQs About HSA-Eligible Expenses
1. Can I use HSA funds for non-medical expenses?
Yes, but non-medical withdrawals are subject to income tax and a 20% penalty. After age 65, the penalty is waived, but withdrawals are still taxable.
2. Are gym memberships HSA-eligible?
Typically, no. Gym memberships are considered general wellness expenses and not medical necessities.
3. Can I use HSA funds for dependents?
Yes, you can use HSA funds for eligible expenses incurred by your spouse or dependents, even if they are not on your HDHP.
4. What happens if I use HSA funds for an ineligible expense?
You will owe income tax on the amount and a 20% penalty unless you’re over 65.
5. How do I find out if an expense is eligible?
Refer to IRS Publication 502 or consult your HSA provider for specific guidelines.
Conclusion
Your HSA can be a versatile tool for covering a wide range of medical expenses beyond the obvious. By staying informed about surprising eligible expenses like travel for medical care, breastfeeding supplies, and acupuncture, you can stretch your healthcare dollars further. Keep meticulous records, use HSA funds wisely, and consult the IRS guidelines or your provider to ensure compliance. With careful planning, your HSA can help you manage both expected and unexpected healthcare costs with ease.