HSA Eligible Expenses

Health Savings Accounts (HSAs) offer a tax-advantaged way to save for medical expenses, but knowing what qualifies as HSA-eligible expenses can be crucial for maximizing their benefits. These accounts are designed to help individuals with high-deductible health plans manage out-of-pocket healthcare costs more effectively. However, not every medical expense qualifies, and using HSA funds for non-eligible expenses can result in penalties and taxes.

For help planning how to use your HSA or any other financial questions, consider working with a financial advisor.

What Is a Health Savings Account?

A health savings account is a tax-advantaged plan that’s designed for healthcare and medical expenses. These accounts are associated with high-deductible health plans, which employers may offer. You may also choose to purchase a high-deductible health plan if you’re self-employed.

When you open an HSA, you’ll generally have access to a payment method, such as a debit card or reimbursement process, that’s linked to your account. You can use this to pay for qualified healthcare expenses.

The amount you can contribute to an HSA depends on whether you have individual or family coverage. For 2026, the HSA contribution limits are as follows:

• $4,400 for individual coverage ($4,500 for 2027) ¹
• $8,750 for family coverage ($9,000 for 2027)

People age 55 or older can contribute an additional $1,000 annually.

The IRS adjusts HSA contribution limits regularly to account for inflation. If you have an HSA at work, both you and your employer can make contributions up to the annual limit. The money in your HSA can earn interest, depending on how you choose to invest. Mutual funds and exchange-traded funds (ETFs) are two common investment options.

With an HSA, contributions are tax-deductible when eligible, while qualifying employer contributions and employee contributions made through a cafeteria plan are generally excluded from taxable income. Savings grows tax-deferred, and withdrawals for HSA-eligible expenses are tax-free.

The money you save in an HSA each year rolls over until you need it. If you take money out of an HSA before age 65 for any reason other than qualified medical expenses, a 20% tax penalty generally applies. You’ll also owe income tax on the distribution.

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 just have to pay ordinary income tax on those non-medical distributions. The 20% additional tax also does not apply to distributions that occur after the account holder becomes disabled or dies.

What Are HSA Eligible Expenses?

HSA-eligible expenses are costs the IRS has deemed as qualified. That means you can use money in your HSA to pay for those expenses without the IRS considering it a taxable distribution. Expenses related to medical care, dental care and vision care generally fall under this umbrella.

Many of the expenses that are considered HSA-eligible are ones that your insurance might not cover. You can use the money in your HSA to cover expenses for yourself or your spouse and eligible dependents, even if they are not covered by your high-deductible health plan. To qualify, the expense must generally be incurred after the HSA was established and cannot have been reimbursed by insurance or another source.

Is every expense HSA eligible? The answer is no, there are some things you can’t pay for using money in a health savings account. Overall, however, the list of HSA-eligible expenses is fairly extensive.

Examples of Common HSA Eligible Expenses

It’s important to check with your healthcare plan administrator to find out exactly what your HSA covers. That can help you avoid unexpected medical bills later. Here are 45 of the most commonly covered expenses under the Internal Revenue Code:

• Abortion
• Acupuncture
• Ambulance fees
• Artificial limbs and teeth
• Bandages
• Birth control pills
• Body scans
• Breast pumps and supplies
• Breast reconstruction surgery
• Chiropractor treatments
• Contact lenses
• Copays and coinsurance
• Crutches
• Dental treatment
• Diagnostic services
• Drug addiction treatment
• Drugs and medicines
• Eye exams
• Eyeglasses
• Eye surgery
• Fertility enhancement
• Guide dogs and other service animals
• Hearing aids
• Home care
• Lab fees
• Lactation expenses
• Long-term care services that meet IRS requirements
• Long-term care insurance premiums within applicable limits
• Nursing care
• Optometry services
• Oxygen
• Physical exams
• Pregnancy tests
• Prosthetics
• Psychiatric care
• Special education
• Sterilization
• Surgery
• Transplants
• Vasectomy
• Vision correction
• Weight loss surgery to treat a qualifying medical condition
• Wheelchairs
• Wigs prescribed for hair loss caused by disease
• X-rays

Note that expenses you incur before you establish an HSA are not eligible. If you establish an HSA after becoming eligible, only expenses that you incur on or after the date of the account’s establishment generally qualify for tax-free reimbursement. An HSA can reimburse eligible expenses incurred after that date even if you no longer qualify to make contributions when you request reimbursement.

CARES Act HSA Eligible Expenses

The Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 expanded the list of includible expenses for HSAs. Under CARES Act rules, you can also use your HSA to pay for the following:

• Acne treatment
• Allergy medications
• Aspirin
• Band-aids
• Breathing strips
• Cold and cough medicine
• COVID-19 tests
• Eye drops
• Heartburn medicine
• Ibuprofen
• Liners
• Menstrual cups and pads
• Nasal spray
• Period panties
• Sleep aids
• Tampons
• Thermometers

Over-the-counter medicines and menstrual care products remain eligible under the CARES Act changes. Other items on this list may qualify under longstanding medical expense rules rather than because of the CARES Act, and eligibility depends on their medical purpose.

The IRS also recognizes certain personal protective equipment, including masks, hand sanitizer and sanitizing wipes purchased primarily to prevent the spread of COVID-19, as eligible medical expenses. This treatment was clarified separately from the CARES Act.

What Expenses Are Not HSA Eligible?

The IRS specifies certain health-related costs that it does not consider qualified medical expenses. Some of the things you can’t use your HSA money to pay for for without a tax penalty include:

• Babysitting, childcare and nursing services for a healthy child
• Controlled substances that are illegal under federal law
• Cosmetic surgery performed solely to improve appearance
• Diaper services unrelated to treating a medical condition
• Electrolysis for cosmetic purposes
• Funeral expenses
• Hair transplants for cosmetic purposes
• Illegal treatments or surgeries
• Maternity clothes
• Swimming lessons for general health or recreation
• Teeth whitening
• Veterinary expenses unrelated to a qualifying service animal

These same expenses are ones that you can’t use to claim a deduction for qualified medical expenses.

Do You Need a Doctor’s Note for HSA Eligible Expenses?

You may need an official diagnosis from a physician to use your HSA to cover certain healthcare expenses without a tax penalty. If you’re unsure what the requirements are, it’s a good idea to check with your HSA administrator and review applicable IRS rules to see whether documentation of medical necessity is needed. Some of the HSA-eligible expenses that may require a diagnosis include:

• Breast implant removal procedures
• Cosmetic procedures scheduled to meet a specific healthcare need
• Electric toothbrushes or other dental products purchased to treat a specific medical condition rather than for ordinary hygiene
• Home and vehicle modifications that may be necessary to accommodate a person with disabilities
• Massage therapy
• Mattresses and special bedding
• Lodging associated with qualifying medical treatment, subject to IRS limits; ordinary meals generally do not qualify unless they are part of eligible inpatient care
• Vitamins and supplements
• Weight loss programs

A doctor’s recommendation alone does not automatically make an expense eligible. The purchase must meet the IRS definition of medical care, which generally requires treatment, diagnosis, mitigation or prevention of a disease, or an expense affecting a bodily structure or function.

Documenting all of your medical expenses is always a good idea if you’re worried about the IRS raising questions later about how you’ve spent HSA funds. For example, if you travel for medical care, you may want to keep a travel log showing your expenses for transportation and qualifying lodging. You can also hold on to copies of receipts for any expenses you pay.

Bottom Line

Understanding HSA-eligible expenses is crucial for anyone looking to maximize the benefits of a Health Savings Account. These accounts offer a tax-advantaged way to save for medical expenses, but knowing what qualifies as an eligible expense can significantly impact your financial planning. Generally, HSA funds can be used for a wide range of medical costs, including doctor visits, prescription medications and even some over-the-counter drugs.

Retirement Planning Tips

• Consider talking to your financial advisor about how to manage your HSA and make the most of the money you’re setting aside. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• While an HSA isn’t specifically designed to be used as a retirement savings tool, you could use one of these accounts to supplement your retirement income. Remember, the money in your HSA carries over from year to year. If you stay healthy in retirement, you could withdraw money from your HSA to pay for day-to-day living expenses or other costs. Just keep in mind that you’ll pay income tax on those distributions.

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