Qualified Medical Expenses
The main purpose of your HSA is to
enable you to pay for qualified medical expenses with tax-free
dollars. Qualified medical expenses are defined under Section 213 of the IRS Code (See IRS Publication 502: Medical and
Dental Expenses). Most people remember to pay for doctor visits and
prescription drugs from their HSA (or save the receipts and reimburse
themselves later), but there are many medical expenses that people simply pay
for, without realizing that because they own an HSA the expense is tax
deductible. These are the most common:
Over-the-counter medications. Remember, your medicine does not necessarily have to
be prescribed to be considered a qualified medical expense. Any time you
buy a bottle of aspirin, cough syrup, bandages, or zit medicine for your teenager
– save the receipt, so you can reimburse yourself from your HSA.
Dental expenses. Dental
fees are typically the most expensive item that people forget to pay for from
their HSA. From
cleanings, to crowns, to dentures, all of your medically necessary dental work
is eligible to be paid from your HSA.
Eye glasses and contacts. Annual eye exams along with prescription glasses, contact lenses,
and other prescription eye glass expenses can be paid from your HSA
tax-free. Also, remember that prescription sunglasses are considered to be
a qualified medical expense.
Physical therapy. Most
individual and family health insurance plans have very limited coverage for
physical therapy. So you can pay for those expenses out of out of your
available HSA funds.
Medical massage therapy. Yes,
you can use funds from your HSA to pay for a massage, as long as your health
care practitioner recommends it as treatment for a particular health condition.
Chiropractor visits. Remember
that your HSA can be used for medically necessary expenses. If you go to
your chiropractor due to a particular injury or functional problem, it is a
qualified expense. The chiropractor’s charges would NOT be considered
eligible if you are getting adjustments for general health maintenance.
In some circles, seeing a
therapist is reason for embarrassment, whereas in other parts of the country
people brag about seeing their therapists. The reality is that mental
therapy should be neither a symbol of shame nor a status symbol – it is simply
another mode of treatment that can help people live healthier and happier
Psychiatry, psychology, psychoanalysis, and psychotherapy – all of these modes of treatment can be paid for from
your HSA. Keep in mind that qualified expenses are those that pay for
treatment or prevention of a medical condition. If you are seeing a
therapist strictly in order to save your marriage or improve your business
skills, these would not be qualifying expenses.
More and more people are
disillusioned with the way conventional medicine is practiced. The focus
often seems to be on treating symptoms rather than reaching the root
cause. Many physicians are very quick to prescribe the latest drug, when
less expensive, safer, and often more effective natural remedies may work
However, the people who do rely on
alternative medical treatments rarely receive reimbursement from their health
insurance for these expenses. This is one of the reasons that HSA plans
have become so popular among people who do favor natural and/or alternative
medical treatments. Here is just a very small sampling of the types of
treatment that would be an HSA-qualified
think the beneficial results of acupuncture are strictly due to the placebo
effect. My veterinarian wife would tell you differently. Though she
mostly practices conventional veterinary medicine, she does do a good bit of
acupuncture on dogs and cats, and gets some amazing results.
controversial, approximately one out of 50 Americans currently uses
homeopathy. Whether using the services of a professional, or simply buying
homeopathic remedies from the natural food store, remember that these expenses
can be paid for from your HSA.
Traditional Chinese Medicine. Chinese medicine has been practiced for thousands of
years, and is becoming ever more popular in the United States. Of course,
treatment modalities that originated in other countries, such as Ayurveda (from
would also be considered a qualified expense.
Faith healing, shamanism, energy
medicine, and other (perhaps) far out stuff. Yep, almost any type of
treatment could be considered an eligible expense. Keep in mind that the
procedure must be related to the treatment or prevention of a specific health
condition. Services designed to raise your chi, balance your chakras, or
strengthen your aura might be more than the IRS
Every Dollar Counts
Every medical expense you incurred
counts, so dont forget to save your receipts. If you dont, its like
paying an extra 25% each time. Even some retailers like Target are
starting to mark on your receipts which items are health related. That should
make it even easier to get every tax break you deserve.
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