HSA-eligible expenses in 2024 and 2025
Health Savings Accounts (HSA) offer many benefits to individuals looking to manage their healthcare expenses efficiently. Understanding the full range of eligible expenses is crucial to maximizing your HSA benefits. This guide provides an in-depth exploration of HSA-eligible expenses, ensuring that you can make the most informed decisions regarding your healthcare expenses.
Understanding Health Savings Accounts (HSA)
An HSA is a tax-advantaged savings account designed to help individuals with high-deductible health plans (HDHPs) save for medical expenses. Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-deductible. Additionally, HSAs offer the potential for tax-free growth through investments.
Eligibility criteria for HSAs
To contribute to an HSA, you must meet the following criteria:
- Be enrolled in a high-deductible health plan (HDHP)
- Not be enrolled in Medicare
- Cannot be claimed as a dependent on someone else's tax return
Detailed list of HSA-eligible expenses
Medical services
- Doctor visits
- Primary care visits
- Specialized consultations
- Telemedicine services
- Preventive care
- Annual physical
- Immunizations
- Cancer screenings
- Hospital services
- Inpatient and outpatient services
- Surgery
- Laboratory fees
- Emergency room visits
Medication prescriptions
- Covered medications
- Prescribed medication
- Insulin
- Over-the-counter medications (with a prescription)
- Pain relievers
- Antihistamines
- Cold and flu medications
Dental and vision care
- Dental expenses
- Routine cleanings
- Fillings
- Crowns and bridges
- Orthodontics
- Vision expenses
- Eye exams
- Prescription glasses
- Contact lenses
- LASIK surgery
Mental health services
- Therapy sessions
- Psychological care
- Drug abuse treatment programs
Medical equipment and supplies
- Durable medical equipment
- Wheelchairs
- Crutches
- Blood pressure monitoring devices
- CPAP machines
- Daily medical supplies
- Bandages
- First aid kits
- Diabetes testing supplies
Reproductive health
- Pregnancy and birth
- Prenatal and postnatal care
- Midwife services
- Fertility treatments
- In vitro fertilization (IVF)
- Artificial insemination
- Fertility medications
Alternative treatments
- Chiropractic care
- Acupuncture
- Homeopathy (if prescribed by a licensed professional)
Long-term care
- Nursing home costs
- Health care services at home
- Supported living facilities
Ineligible expenses
While HSAs cover a wide range of expenses, some costs are not eligible for tax-free withdrawals. These include:
- Cosmetic procedures
- Nutritional supplements without a prescription
- Gym memberships
- Elective surgeries for aesthetic purposes
How to maximize your HSA
Regular contributions
Maximize your HSA contributions annually to take full advantage of the tax benefits. For 2024, contribution limits are $3,850 for individuals and $7,750 for families, with an additional $1,000 contribution for those 55 or older.
Smart withdrawals
Plan your withdrawals carefully to ensure they are for qualified medical expenses, thus avoiding taxes and penalties. Keep detailed records of all medical expenses to substantiate your claims if necessary.
List of HSA-eligible expenses
Below are some common HSA-eligible expenses approved by the IRS. Note that this list is not exhaustive. Always check with your plan provider if you have questions about whether an expense is covered.
- Abortion
- Acne treatment with laser
- Acupuncture
- Ambulance and emergency care fees
- Artificial limbs
- Birth control pills, injections, and devices such as IUDs
- Blood pressure monitors
- Body scans
- Breast pumps and breastfeeding supplies
- Breast reconstruction surgery following cancer
- Canes and walkers
- Childbirth expenses, such as midwife or obstetrician care
- Childbirth classes for the expectant mother
- Chiropractic care
- Contact lenses and saline solution
- Crutches
- Dental care, including cleanings, sealants, fluoride treatments, X-rays, fillings, braces, extractions, and dentures
- Diabetes supplies, such as blood sugar test kits and insulin
- Diabetes education, including nutrition counseling
- Eye exams
- Eye surgery, including laser surgery
- Eyeglasses, including prescription and reading glasses, and prescription sunglasses
- Blue light blocking glasses
- First aid kits
- Flu shots
- Guide dogs for assistance to the disabled
- Food, care, and veterinary care for guide dogs
- Hearing aids and batteries
- Hospital expenses for inpatient and outpatient services
- Infertility treatment, including in vitro fertilization; egg, sperm, and embryo storage; fertility monitors; and sperm washing
- Egg donor expenses related to infertility treatment
- Inpatient drug and alcohol treatment
- Insulin
- Lab fees
- Long-term care premiums, up to a qualified amount based on your age
- Medical alert bracelets
- Medical record fees
- Medicare premiums if you are 65 or older, excluding Medicare supplemental policies
- Night guards for teeth grinding
- Nursing care, whether provided in your home or a nursing home
- Occupational therapy
- Oxygen equipment and oxygen
- Physical exams
- Physical therapy
- Prescription medications
- Psychiatric care
- Psychological care
- Smoking cessation programs and medications, including nicotine patches and gum
- Speech therapy
- Surgery, excluding elective cosmetic surgery
- Thermometers
- Tubal ligation (female sterilization) and reversal
- Ultrasounds
- Vaccines
- Vasectomy (male sterilization) and reversal
- Wheelchairs
- X-rays
Investment Opportunities
Consider investing a portion of your HSA funds to grow your tax-free savings. Many HSA providers offer a variety of investment options, including mutual funds and stocks.
Changes and Future Considerations
The list of HSA-eligible expenses is subject to change based on legislation and IRS guidelines. Stay updated with the latest changes to ensure compliance and optimal use of your HSA.
Conclusion
Health Savings Accounts provide a versatile and tax-advantaged way to manage your healthcare costs. By understanding the breadth of eligible expenses and optimizing your contributions and withdrawals, you can significantly reduce your out-of-pocket medical expenses. Regularly review and update your knowledge of HSA regulations to ensure you are making the most of this valuable financial tool.