Health Savings Account and Flexible Spending Account Eligible Expenses
Overview
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are tax-advantaged health care spending accounts that allow you to pay for qualified medical expenses with pre-tax dollars, reducing your overall tax liability.
ImportantDisclaimer:This guide provides general information about commonly eligible expenses. Eligibility varies by individual plan design and employer policies. Always confirm with your plan administrator or accountant before making expense determinations, as rules are subject to change and IRS regulation updates.
Medical and Dental Services
Qualified medical and dental expenses include payments for services rendered by licensed healthcare practitioners.
Routine Medical Care
Doctor visits and office visits
Preventive care and screenings
Lab work and blood tests
Hospital care and inpatient procedures
Urgent care and emergency room visits
Nurse services and home health care
Vaccinations and immunizations
Physical examinations
Specialized Care
Acupuncture and acupuncturists
Chiropractic care and adjustments
Mental health services (psychiatrist, psychologist, therapist)
Physical therapy and rehabilitation
Occupational therapy
Speech therapy
Massage therapy (with Letter of Medical Necessity)
Hydrotherapy and water therapy
Dental Treatment
Preventive cleanings and examinations
X-rays and diagnostic services
Fillings, crowns, and bridges
Root canals and endodontic procedures
Extractions and tooth removals
Orthodontia (braces, aligners like Invisalign)
Dentures and denture adjustments
Prescription toothpaste (e.g., Prevident)
Periodontal treatment
Gum grafts and surgical procedures
Teeth whitening (if medically necessary, typically not covered)
Vision Care
Eye examinations and optometry
Prescription eyeglasses and lenses
Contact lenses and solutions
LASIK surgery and PRK procedures
Cataract surgery
Eye drops (prescription and some OTC formulations)
Lens cleaning supplies and cases
Polarized, photochromic, and specialty lenses
Medications and Pharmaceuticals
Prescription Medications
All FDA-approved prescription drugs
Insulin and diabetic medications
Birth control and contraceptive pills
Antibiotics and infection treatments
Maintenance medications for chronic conditions
Over-The-Counter (OTC) Medications
Following the CARES Act (effective January 1, 2020), the following OTC medications are now eligible without a prescription:
Massage therapy (with Letter of Medical Necessity)
Sauna and infrared sauna therapy (with medical recommendation)
Meditation and mindfulness apps (if medically prescribed)
Sleep aids and sleep improvement devices
Temperature-controlled bedding or mattress toppers (medically necessary)
Air purifiers (medically necessary for respiratory conditions)
Humidifiers and air humidification devices
Additional Medical Expenses
Related Healthcare Costs
Medical insurance deductibles
Medical insurance copayments and coinsurance
Long-term care insurance premiums
Health insurance premiums (while unemployed or receiving COBRA)
Certain long-term care services and insurance
Medicare premiums and supplemental insurance (for retired individuals)
Transportation to medical appointments (including airfare and lodging when away from home for outpatient care)
Ambulance services
Guide dogs and service animals (associated costs)
Preventive and Diagnostic Services
Health screenings and preventive care
COVID-19 diagnostic testing and treatment
Flu shots and vaccinations
Cancer screenings
Pregnancy testing
Diagnostic imaging (X-rays, MRI, CT scans)
Pathology services
Special Circumstances
Breast reconstruction following mastectomy
Breast reduction surgery (if medically necessary)
Lead paint removal and remediation (medically necessary)
Surgical procedures
Post-surgical care and rehabilitation
Prosthetics and artificial body parts
Artificial teeth and dentures
Braille books and magazines (for visually impaired)
Items NOT Eligible for HSA/FSA Reimbursement
Important: The following are specifically NOT eligible for HSA or FSA distributions:
Cosmetics and cosmetic procedures (unless medically necessary for reconstruction)
Toothpaste and mouthwash (unless prescription formulation for medical condition)
Facial creams and skincare products (unless prescribed for medical condition)
Sunscreen and lip balm (general wellness use)
General grooming supplies
Hair loss treatments (unless prescribed for medical condition)
Teeth whitening (unless medically necessary)
Baby formula (general nutrition)
Diaper service or diapers (general care)
Maternity clothes
Domestic help and housekeeping (general services)
Educational classes (general knowledge)
Exercise equipment for general fitness (without medical necessity letter)
Gym memberships (without medical necessity letter)
Diet foods (general nutrition)
Dietary supplements (without medical necessity)
Discount dental plans
Illegal drugs and medications
Life, disability, or income protection insurance premiums
Swimming pools and hot tubs (general wellness)
Funeral and burial expenses
Car insurance premiums (medical portion excepted)
Social activities
Babysitting and childcare
Travel for general wellness purposes
Documentation and Compliance
Important Rules for HSA/FSA Spending
Record Keeping Requirements:
Maintain receipts and documentation for all purchases
HSAs do not require submission of receipts to the custodian, but you must keep proof
FSAs typically require more detailed substantiation from the employer
Retain documentation for IRS audit purposes (generally 3-7 years)
Substantiation:
Save itemized receipts showing the nature of the expense
Retain explanations of benefits (EOBs) from insurance providers
Document provider credentials for professional services
Keep prescriptions for prescription medications
Letters of Medical Necessity:
Some borderline expenses require a Letter of Medical Necessity (LMN) from a licensed provider
Examples include: gym memberships for specific conditions, supplements for treatment, massage therapy
Request LMN directly from your treating physician
Submit to HSA/FSA administrator per plan instructions
Plan Variations
Rules and eligible items vary significantly by:
Employer plan design
FSA administrator policies
HSA custodian interpretations
State regulations
Individual plan document terms
Always consult your specific plan documents and administrator before making determination of eligibility.
References
[1] Internal Revenue Service. (2024). Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans. https://www.irs.gov/publications/p969
This document is provided for informational purposes only and does not constitute professional tax or legal advice. Healthcare professionals should consult with qualifed tax advisors, compliance offcers, and plan administrators regarding specifc eligibility determinations for individual circumstances. Rules and eligible items are subject to change based on IRS regulations and plan modifications.