UpCounsel accepts only the top 5 percent of lawyers to its site. If you need help navigating HSA-eligible expenses, you can post your legal need on UpCounsel's marketplace. HSA owners are allowed to use HSA funds to pay for insurance premiums covering long-term care. They may also use their HSA funds to cover Medicare premiums. In addition, employees who are enrolled in health insurance (not COBRA) and who also receive unemployment compensation are allowed to pay for their insurance premiums with their HSA funds.Įmployees who are 65 years of age or older may pay their premium portion of a health insurance plan provided by an employer with their HSA funds. There are, however, some exceptions.įor employees who elect for COBRA coverage, they may pay for COBRA premiums with their HSA funds. In general, you can't use HSA funds to pay for your health insurance premiums. HSA Funds and Their Relation to Insurance Premiums These expenses can range from AA meetings, acupressure, and adult day care to defibrillators and disposable underwear. In addition, some treatments are covered only if they're deemed medically necessary. Because there are differences between HSAs, FSAs, LCFSAs (limited care flexible spending accounts), and DCFSAs (dependent care flexible spending accounts), some medical issues that are eligible under one plan are not eligible under others. This way, you won't have to pay out-of-pocket for a service you mistakenly believed to be eligible for coverage. If you have specific questions or concerns relating to a procedure, it's best to consult with your plan or plan provider. ![]() In general, you'll need a prescription for HSA-eligible medical items such as: Such non-prescription items that are generally HSA-eligible include: You do not generally need a prescription for products that don't contain active medical ingredients. These are not meant to be exhaustive lists, and you should consult with your particular HSA plan to be clear about eligible vs. IRS-qualified medical expenses often include: Types of expenses that are generally ineligible include: Equipment to assist the hearing- or vision-impaired.Other types of medical expenses that may be eligible include services and procedures pertaining to: Weight loss programs, unless prescribed by a doctor to treat a diseaseįor all health accounts, while qualified expenses are similar, expect some differences between health savings accounts and flexible spending accounts.Įligible expenses are those that seek to alleviate or prevent certain illnesses, physical, or mental defects this includes illnesses and issues related to dental and vision care.Teeth whitening products and procedures.Toiletries such as toothpaste and toothbrushes.Over-the-counter medication with no prescription.Types of expenses that fall into the non-qualified category include: A 20 percent penalty is assessed for non-qualified expenses. If you use an HSA to pay for expenses that are not qualified, you must pay income tax on those funds. Just a few examples of what qualified expenses include: The IRS determines which expenses are eligible for reimbursement and which are not eligible because health accounts are created by the tax code. What Counts as Qualified Medical Expenses? ![]() This makes HDHPs attractive for anyone who wishes to minimize upfront costs that often accompany quality health care. However, your monthly premiums are typically much lower than those plans with lower deductibles. An HDHP has high deductibles, which is one of its disadvantages. HSA Eligibilityīefore you can be eligible for an HSA, you must first be enrolled in what's known as a High-Deductible Health Plan, also known as an HDHP. Any expenses incurred before your effective date will not be covered or reimbursed. Dependents are eligible as long as they were claimed on an employee's taxes during the time when they received medical services or when expenses were paid.Įxpenses are considered eligible only if they are incurred after the HSA effective date. Guidelines for spouses and dependents of enrollees are the same as for the employee, as long as the enrollee was married to the spouse during the time the spouse received the medical services or when payment was made for medical expenses. Over-the-counter, non-prescription medications are generally not included as qualified medical expenses.
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