Understanding Health Savings Accounts (HSAs): What Can You Use Them For?

A Health Savings Account (HSA) is a powerful financial tool that allows you to save money on healthcare expenses by using pre-tax dollars. However, not all medical costs are eligible for HSA funds. Understanding what you can and cannot use your HSA for can help you maximize its benefits.

✅ Eligible HSA Expenses

Medical Expenses

HSA funds can be used for a wide range of medical costs, including:

• Doctor visits, including specialists
• Hospital stays, surgeries, and emergency room visits
• Prescription medications and certain over-the-counter (OTC) drugs with a prescription
• Medical tests such as X-rays, MRIs, and bloodwork
• Physical therapy and rehabilitation
• Chiropractic care and acupuncture (if for medical treatment)
• Fertility treatments and birth control

Dental & Vision Expenses

You can also use HSA funds for dental and vision care, including:

• Dental cleanings, fillings, and root canals
• Braces and orthodontics
• Eyeglasses, contact lenses, and eye exams
• Laser eye surgery

Preventive & Wellness Care

Preventive care is key to maintaining good health, and HSAs can cover:

• Annual checkups and physical exams
• Vaccinations, including flu shots
• Smoking cessation and weight-loss programs (if prescribed)

Medical Equipment & Supplies

Many medical devices and home care products are HSA-eligible:

• Hearing aids and batteries
• Wheelchairs, crutches, and walkers
• CPAP machines and diabetic supplies
• First aid kits, thermometers, and bandages

Mental Health & Therapy

HSA funds can also support mental health care:

• Psychologists, psychiatrists, and counselors
• Substance abuse treatment
• Marriage and family therapy (if medically necessary)

🚫 Ineligible HSA Expenses

Not all health-related expenses qualify for HSA use. You cannot use HSA funds for:

• Cosmetic procedures (e.g., Botox, plastic surgery, teeth whitening)
• General wellness costs (e.g., gym memberships, vitamins, supplements)
• Non-prescribed OTC medications (unless prescribed by a doctor)
• Funeral expenses

💰 Can You Use an HSA for Health Insurance Premiums?

Generally, you cannot use an HSA to pay for health insurance premiums. However, there are a few exceptions:

• COBRA Coverage: You can use HSA funds to pay for COBRA premiums if you leave a job.
• Unemployment: If you are receiving unemployment benefits, HSA funds can cover health insurance premiums.
• Medicare (After Age 65): HSA funds can pay for Medicare Part B, Part D, and Medicare Advantage (Part C) premiums but not Medigap (Medicare Supplement plans).
• Long-Term Care Insurance: HSA funds can cover long-term care insurance premiums, but there are annual limits based on age.

🔄 What Happens After Age 65?

Once you turn 65, you can withdraw HSA funds for any purpose without penalty. However, if the funds are not used for qualified medical expenses, they will be taxed as regular income.

At this age, you can also use HSA funds to pay for Medicare premiums (Part B, Part D, and Medicare Advantage), but not Medigap.

📌 Final Thoughts

HSAs are an excellent way to save for medical expenses while reducing taxable income. By understanding what expenses qualify, you can make the most of your HSA and avoid unnecessary taxes or penalties.