Qualified medical expenses
Because health accounts were created by the tax code, it's the Internal Revenue Service that determines what expenses can be reimbursed and what cannot. Here are some examples of qualified and nonqualified medical expenses.
Examples of qualified expenses
- Alcohol and drug addiction treatment
- Breast reconstruction surgery
- Dental treatment
- Diagnostic tests and devices
- Doctor's visits
- Eyeglasses, contact lenses and exams
- Fertility enhancements
- Hearing aids and batteries
- Operations/surgery (non-cosmetic)
- Nursing services
- Physical therapy
- Psychiatric care
- Smoking cessation
Examples of nonqualified expenses
If you use your HSA to pay for nonqualified expenses, you'll have to pay income taxes on those funds. You will also be assessed a 20% penalty. The following are examples of nonqualified expenses:
- Cosmetic surgery
- Diaper service
- Electrolysis or hair removal
- Funeral expenses
- Health club dues
- Illegal operations and treatments
- Maternity clothes
- Nutritional supplements
- Over-the-counter medicines for which you do not have a doctor's prescription
- Toiletries (e.g. toothbrush, toothpaste)
- Teeth whitening
- Weight loss programs (unless prescribed to treat a specific disease)
Differences among accounts
Qualified medical expenses are similar for all health accounts, but there are some differences:
Any otherwise unreimbursed expenses as defined under 213(d) of the Internal Revenue Code, except amounts distributed to pay health insurance premiums*, are eligible.
People older than age 65 can use HSA funds to pay for nonqualified expenses, but they must report the disbursements as taxable income.
* Premiums can be reimbursed for:
Any otherwise unreimbursed expenses as defined under 213(d) of the Internal Revenue Code, except health insurance premiums and long-term care services, are eligible.
Note: Savings accounts can also be established for dependent care and commuter expenses.
Employers configure the account to reimburse all* or some of any otherwise unreimbursed expenses as defined under 213(d) of the Internal Revenue Code.
* Long-term care services and premiums for coverage under employer pretax plans are not reimbursable.
Download HSA and FSA-specific PDFs
The PDFs listed below include the most common examples of qualified medical expenses for FSAs and HSAs. Click the links to download a copy.