10 Things You Didn’t Know You Could Use Your HSA For
A health savings account can be used to pay for more than doctor visits and prescription drugs. Learn about these HSA-qualified expenses.
By Maryalene LaPonsie | Originally posted US News
Anyone with a qualified high-deductible health insurance plan can open a health savings account, also known as an HSA. Money deposited into these accounts is tax-deductible and can be used tax-free to pay for eligible medical expenses.
"The definition (of eligible expenses) is so vast that it covers things people never even thought about," says Kristian Finfrock, a financial advisor and founder of Retirement Income Strategies, which has four locations in Wisconsin.
In addition to doctor bills, hospital stays and prescription drugs, HSAs can also pay for the following items, which might surprise you:
Over-the-counter medications.
Menstrual products.
Alternative treatments.
Travel for health care.
Dental and vision care.
Guide dogs.
Some insurance premiums.
Medicare costs.
Future medical expenses.
A retirement fund
Over-the-Counter Medications
The Coronavirus Aid, Relief and Economic Security – or CARES – Act may be best known for providing stimulus checks to citizens and financial aid to businesses during the COVID-19 pandemic. But it also expanded the items eligible for HSA reimbursement, says Leif O'Leary, CEO of Alegeus, which provides a cloud-based platform for administering health care benefits accounts.
Under the CARES Act, over-the-counter products and medications are eligible for reimbursement from an HSA, no prescription required. However, the new rules only apply to purchases made after Dec. 31, 2019.
Menstrual Products
Along with over-the-counter medications, menstrual products were also included in the CARES Act as newly eligible for HSA reimbursements. Products must be purchased after Dec. 31, 2019, to qualify, and eligible items include pads, liners, tampons, cups and similar items designed for period protection.
Alternative Treatments
Acupuncture, chiropractic care and weight-loss programs may all qualify for tax-free reimbursement from a health savings account. "You can use your HSA even if your insurance won't pay for them," says David Shuley, co-founder and principal of Northwestern Mutual's Private Client Group, Esteem Wealth Partners in Cincinnati.
Travel for Health Care
The cost of meals and lodging at a hospital or similar institution may be reimbursable from an HSA, so long as medical care is your main reason for being there, according to Lori MacDonald, cash management manager at Citizens Equity First Credit Union, which is based in Peoria, Illinois.
If you are a parent traveling with a sick child, you may be able to reimburse expenses for both yourself and your child, up to a limit. "It is the HSA owner's responsibility to determine whether withdrawals are qualified or consult with their competent tax advisor," MacDonald notes.
Dental and Vision Care
Use an HSA to save money on dental care, eye exams, eyeglasses and more. Regardless of whether you have insurance coverage for these services, you can use your health savings account to pay for expenses using tax-free dollars.
Guide Dogs
Those with physical disabilities, such as vision or hearing impairment, can use money from their HSA to pay for the cost of buying, training and maintaining a guide dog or service animal.
"You could probably make the argument for an emotional support dog," Finfrock says. However, the IRS specifies service animals so it's best to consult with a qualified tax professional to confirm your dog qualifies.
Some Insurance Premiums
"One of the biggest worries people have as they age is how do they pay for long-term care," Shuley says. Long-term care insurance can help alleviate that concern, and an HSA allows policyholders to pay their premiums using tax-free dollars. Some hybrid policies, which combine long-term care benefits with life insurance, may not qualify though.