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NEED TO KNOW
You can shop for HSA-qualified items on www.Drugstore.com. Use your OptumHealth Bank SM HSA Debit MasterCard® to pay. | |
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Qualified Medical Expenses
You can use your HSA to pay for qualified medical expenses for you, your spouse and your dependents.
Examples of Qualified Medical Expenses
IRS Publication 969 explains that qualified medical expenses are those that would generally qualify for the medical and dental expenses deduction, as listed in IRS Publication 502. Examples are listed below.
- Doctor's office visits (non-preventive care)
- Dental care and braces
- Eyeglasses, contacts and LASIK surgery
- Prescription medications
- Acupuncture
- Chiropractic services
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- Hearing aids (including batteries)
- Long-term care medical expenses and insurance premiums
- Stop-smoking programs
- Physical therapy
- Psychiatric care
- Psychological counseling
- Nursing home care
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Examples of Nonqualified Medical Expenses
If you use your HSA to pay for nonqualified expenses, you'll have to pay income taxes on those funds. You will also be assessed a 10% penalty (20% starting in 2011). Following are examples:
- Over-the-counter drugs (unless prescribed by a doctor)*
- Premiums (in most situations; see exceptions below)
- Advance payment for future medical care
- Amounts reimbursed from another source, such as a health plan or FSA
- Cosmetic surgery (unless due to trauma or disease)
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- Child care for a healthy baby
- Funeral expenses
- Health club dues
- Maternity clothes
- Toiletries
- Swimming lessons
- Weight loss programs not prescribed to treat a specific disease
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*Over-the-counter drugs without a prescription can be purchased with your HSA until Dec. 31, 2010. Starting on Jan. 1, 2011, you will need a prescription to use your HSA for over-the-counter drugs.
Exceptions
Generally, you can't use your HSA to pay for health insurance premiums. But there are exceptions. You can use your HSA for health plan premiums if:
- You are receiving federal or state unemployment benefits.
- You have COBRA continuation coverage.
- You have eligible long-term care insurance.
- You are enrolled in Medicare.
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Meet Erin
Qualified Medical Expenses
