HSA funds can pay for any “qualified medical expense”, even if the expense is not covered by your HDHP. For example, most health insurance does not cover the cost of over-the-counter medicines, but HSAs can. If the money from the HSA is used for qualified medical expenses, then the money spent is tax-free.
While we cannot provide a definitive list of “qualified medical expenses”. A partial list is provided in IRS Pub 502 (available at www.irs.gov). You are responsible for deciding what is a qualified medical expense. Keep your receipts in case you need to defend your expenditures or decisions during an audit.
Some examples of qualified medical expenses include:
• Insurance deductibles and co-payments
• Prescription and over-the-counter drugs
• Vision care
• Dental care
• Long-term care
• Medically-related transportation and lodging
• Physical therapy
• Nursing care
• Chiropractic care
HDHPs and HSA Administrators
How Funds Are Used
Qualified Medical Expenses
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