HSA ELIGIBLE EXPENSES PLUS

The CARES Act also added items designed to reduce the spread of COVID, including hand sanitizer, hand wipes and masks. Under CARES Act rules, you can also use your HSA to pay for the following: The Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 expanded the list of includible expenses for HSAs. Depending on the laws in your state, your expenses may not become eligible until after you’ve made your first contribution to a health savings account. It’s important to note that expenses you incur before you enroll in an HSA are not eligible. Here are some of the most commonly covered expenses under the Internal Revenue Code. That can help you avoid unexpected medical bills later. It’s important to check with your healthcare plan administrator to find out exactly what’s covered if you have an HSA. Overall, however, the list of HSA eligible expenses is fairly extensive. Is every expense HSA-eligible? The answer is no, there are some things you can’t pay for using money in a health saving account. The money in your HSA can be used to pay for expenses for yourself if you have individual coverage or your spouse and any dependents you have if you’re enrolled in a family plan. Many of the expenses that are considered HSA-eligible are ones that your insurance might not cover. Expenses related to medical care, dental care and vision care fall under this umbrella. That means you can use money in your HSA to pay for those expenses without it being considered a taxable distribution. HSA eligible expenses are ones the IRS has deemed as qualified. You’ll just have to pay ordinary income tax on those distributions. Once you reach age 65, you can withdraw money from a health savings account for any reason, regardless of whether you use the funds for healthcare. You’ll also owe income tax on the distribution.

If you take money out of an HSA before age 65 for any reason other than healthcare, a 20% tax penalty applies. That means unlike a Flexible Spending Account (FSA), an HSA is not use it or lose it. The money you save in an HSA each year rolls over until you need it.

Cosmetic surgery (unless a wig related to hair loss from disease)įor further information, refer to IRS publication 502.

Travel your doctor told you to take for rest or change.

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.

Life insurance or income protective policies.

Health insurance premiums other than those listed above, including Medicare Supplement, Medicare Part D Rx Plans, and Medigap policies.

The following are expenses that are often mistaken as qualified HSA expenses, but are NOT eligible:

For individuals over age 65 - premiums for Medicare A or B, Medicare HMO, and the employee share of premium for employer-sponsored health insurance.

Health care coverage while an individual is receiving unemployment compensation.

COBRA or State Continuation health care continuation coverage.

Most insurance premiums do not qualify as a health-savings-account expense, but there are a few including: Insurance Premiums That Qualify as HSA Expense Medical conferences (for ill spouse/dependent)Ĭosmetic surgery (from trauma or disease) As always, consult your tax advisor should you require specific tax advice.Ĭar special hand controls(for disability) Remember, the IRS may modify its list of eligible expenses from time to time. The following list provides examples of eligible and ineligible medical expenses.

HSA ELIGIBLE EXPENSES PLUS

The expenses must be primarily to alleviate or prevent a physical or mental defect or illness, including dental and vision.Īny 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.

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.

Hsa eligible expenses