What You Can Spend Your HSA Money On

Understanding What Counts as a Qualified Medical Expense

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Since you don’t pay income taxes on money you put into your Health Savings Account, and interest and earnings grow tax-deferred within the account, the IRS limits what you can spend your HSA money on without facing taxes and penalties. You’re only permitted to use it for qualified medical expenses. If you spend your HSA money on anything other than a qualified medical expense before you turn 65, you’ll have to pay income taxes plus a 20% penalty.

Understanding what constitutes a qualified medical expense to spend your HSA money on isn’t always clear cut. Adding to the confusion, the list of HSA eligible expenses is slightly different than the list of more commonly known Flexible Spending Account eligible expenses. In order to see the exhaustive list of expenditures you’re allowed to spend your HSA money on, as well as those that aren’t allowed, you’ll have to read both IRS Publication 502 and IRS Publication 969.  

Here’s a synopsis:

Cost-Sharing Expenses

Your HSA is usually paired with a High Deductible Health Plan, or HDHP.  The primary purpose for your HSA is to help manage and budget for the very high deductible associated with your HDHP health insurance. Therefore, the bulk of your yearly HSA withdrawals will usually go toward your health insurance deductible, which is a qualified medical expense.

Other health insurance cost-sharing expenses also qualify, including health insurance copayments and coinsurance.

Certain Health Insurance Premiums

Although most health insurance premiums aren’t HSA-qualified medical expenses, there are a few that are:

  • COBRA continuation health insurance premiums for you, your spouse, and your dependents.
  • Health insurance premiums when you’re receiving government unemployment benefits.
  • Medicare premiums (excluding Medicare supplemental coverage like Medigap) after you turn 65.
  • Long term care insurance (subject to age-based limits.)

Professional Medical Services Not Covered By Health Insurance

Services of medical professionals that you pay for out-of-pocket are normally counted toward your HDHP deductible so they're already a qualified medical expense. However, some health plans don’t include coverage for particular types of medical services. In these cases, the money you pay out-of-pocket for doesn’t count toward your deductible. The service is still a qualified medical expense if it's to treat or prevent a physical illness or defect, or treat a mental illness. Here are some examples:

  • Acupuncture.
  • Chiropractic care.
  • Care provided by a Christian Science practitioner.
  • Care provided by a psychologist, psychiatrist, or therapist.


  • Prescription medications.
  • Insulin.
  • Over-the-counter medications only with a prescription.

Dental Care

  • Cleaning by dental hygienist.
  • Routine dental exam by dentist.
    • Treatments like fillings, root canals, dentures, braces, and orthodontics.
    • Products used to care for dentures.

    Vision Care

    • Optometrist or Ophthalmologist exam.
    • Eye surgery to correct your vision, an eye defect, or to treat an illness.
    • Glasses or contact lenses for vision correction, including reading glasses.
    • Contact lens solutions.
    • Eye drops.

    Reproductive Care

    • Contraceptives, condoms, IUDs, and sterilization surgery like vasectomy.
    • In vitro fertilization expenses.
    • Pregnancy test kits.
    • Birth preparation classes (Lamaze).
    • Breast feeding supplies.

    Home Medical Supplies

    A general rule of thumb for home medical supplies: an item is likely a qualified medical expense if the item is intended to treat an illness, injury, or defect rather than to promote general health and wellbeing, or basic personal care like hygiene. Examples of home medical supplies you can spend your HSA money on include:

    • First aid kit.
    • Thermometer.
    • Splints, Ace wraps, joint supports and braces.
    • Wound care products like Band-Aids and bandages.
    • Sunburn cream.

    Foot Care Products to Treat a Foot Ailments

    • Shoe inserts.
    • Arch supports.
    • Moleskin anti-blister pads.
    • Bunion cushions.

    Medical Devices to Monitor, Treat, or Prevent a Medical Condition

    • Glucometer, testing strips, and diabetic supplies.
    • Blood pressure cuff or monitor.
    • Hearing aids and hearing aid batteries.
    • Heart rate monitor.
    • Cardiac defibrillator.
    • Pulse oximeter oxygen monitor.

    Remember, you may use your HSA funds to pay the eligible medical expenses for you, your spouse, your dependents, and even your children up to age 26 years old. However, you don’t have to spend your HSA money at all if you don’t want to. Unlike the use-it-or-lose-it design of a Flexible Spending Account, with an HSA, you don’t have to withdraw money based on any schedule. You may let it sit in the HSA earning tax-deferred interest for as long as you like.

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