Funds you withdraw from your HSA are tax-free when used to pay for qualified medical expenses as described in Section 213(d) of the Internal Revenue Service Tax Code. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness, including dental and vision.
Any funds you withdraw for non-qualified medical expenses will be taxed at your income tax rate plus 20% tax penalty if you’re under 65.
The following list provides examples of eligible and ineligible medical expenses. This list is not all-inclusive. Remember, the IRS may modify its list of eligible expenses from time to time. As always, consult your tax advisor should you require specific tax advice.
HSA Qualified Expenses
| Acupuncture | Hearing aids | Post-nasal treatments |
| Alcoholism treatment | Laboratory fees | Prenatal care |
| Ambulance | Lasik surgery | Prescriptions |
| Artificial limb | Learning disability fees (prescription) | Prosthesis |
| Artificial teeth | Life-care fees | PSA test |
| Bandages | Lodging (for out-patient treatment) | Psychiatric care |
| Birth control pills (prescription) | Long-term care (medical expenses) | Psychiatrist |
| Breast reconstruction | Long-term care insurance | Psychoanalysis |
| Car special hand controls(for disability) | Meals (while receiving treatment) | Psychoanalyst |
| Chiropractors | Medical conferences (for ill spouse/dependent) | Psychologist |
| Christian Science practitioners | Medicare deductibles | Radium treatment |
| COBRA premiums | Nursing care | Smoking cessation programs |
| Contact lenses | Obstetrician | Special education for children |
| Cosmetic surgery (from trauma or disease) | Operating Room Costs | Spinal tests |
| Crutches | Organ transplant | Splints |
| Dental treatment | Orthodonture | Sterilization |
| Dermatologist | Orthopedic shoes | Telephone & TV for hearing impaired |
| Diagnostic devices | Orthopedist | Transportation expenses for treatment |
| Disabled dependent care | Out-of-pocket expenses (Medicare) | Vaccines |
| Drug addiction treatment (inpatient) | Over-the-counter medicine -No longer eligible as of 2011 |
Vitamins (if prescribed) |
| Eyeglasses | Oxygen and equipment | Wheelchair |
| Fertility enhancement | Pediatrician | Weight loss programs |
| Guide dog | Personal care services (for ill) | Wig (hair loss from disease) |
| Gynecologist Deductible | Podiatrist | X-rays |
| Health institute (if prescribed) | Post-nasal treatments |
Insurance Premiums That Qualify as HSA Expense
Most insurance premiums do not qualify as a health-savings-account expense, but there are a few including:
- Qualified long-term care insurance
- COBRA or State Continuation health care continuation coverage
- Health care coverage while an individual is receiving unemployment compensation
- For individuals over age 65 — premiums for Medicare A or B, Medicare HMO, and the employee share of premium for employer-sponsored health insurance
Expenses NOT Eligible for under an HSA
The following are expenses that are often mistaken as qualified HSA expenses, but are NOT eligible:
- Health insurance premiums other than those listed above, including Medicare Supplement, Medicare Part D Rx Plans, and Medigap policies
- Life insurance or income protective policies
- The hospital insurance benefits tax, withheld from you pay as part of the Social Security tax or paid as part of Social Security self-employment tax
- Nursing care for a healthy baby
- Travel your doctor told you to take for rest or change
- Cosmetic surgery (unless a wig related to hair loss from disease)
- Teeth Bleaching
For further information, refer to IRS publication 502 .
Comments
0 comments
Please sign in to leave a comment.