Can You Use Your HSA for Over-the-Counter Medicine?

Yes, you can use your HSA for over-the-counter medicine without a prescription. A rule change under the CARES Act made this permanent for purchases on or after January 1, 2020, reversing an earlier Affordable Care Act requirement that had forced HSA holders to get a doctor’s note for standard OTC drugs. The categories that qualify are broad, but not everything sold at a pharmacy counts, and a few products still need documentation from a provider.

Which OTC Products Qualify

The 2020 change covers standard over-the-counter medicines that treat a specific symptom or condition. Common eligible categories include:

Pain relievers such as ibuprofen, acetaminophen, naproxen, and aspirin
Allergy treatments, including antihistamines, decongestants, and nasal corticosteroid sprays
Cold and flu remedies: cough suppressants, expectorants, and throat lozenges
Digestive health products such as antacids, acid reducers, and anti-diarrheal medications
Topical treatments, including anti-itch creams, antibiotic ointments, and medicated skin treatments
Sleep aids and motion sickness medications
Eye drops, ear drops, and nasal sprays
Sunscreen with SPF 15 or higher and broad-spectrum protection

The same law also made menstrual care products a qualified medical expense. Federal law treats amounts paid for tampons, pads, liners, cups, sponges, and similar products as medical care for HSA purposes.¹

First aid supplies such as bandages, gauze, adhesive tape, thermometers, and hot or cold packs also qualify, under the separate rules for medical equipment and supplies.²

What Your HSA Still Won’t Cover

General health, hygiene, and cosmetic items remain ineligible, even when you buy them at a pharmacy. That includes toothpaste, deodorant, shampoo, shaving cream, makeup, soap, and mouthwash.³

The line is whether the product treats or prevents a medical condition or simply promotes appearance or general health. A medicated acne treatment qualifies. A regular facial cleanser does not.

Vitamins and Supplements: The Letter of Medical Necessity

Vitamins, nutritional supplements, and herbal products sit in a gray area. They are only eligible if a medical practitioner recommends them as treatment for a specific diagnosed condition.²

To use HSA funds on these items, get a Letter of Medical Necessity from your doctor or another licensed provider. It should identify the diagnosed condition and explain why the product is needed to treat it, not just to maintain general health. A daily multivitamin taken to stay healthy does not qualify. The same supplement recommended to address a documented deficiency may.

Keep the letter on file. Most HSA administrators expect to see it if your account is reviewed, and letters are typically good for about 12 months before you need a renewed recommendation.

How to Pay for OTC Items

The simplest method is swiping your HSA debit card at the register. Many large retailers use the Inventory Information Approval System, which scans your cart and applies HSA funds only to eligible items. When that system is in place, the checkout separates qualifying purchases from non-qualifying ones automatically.

If a store doesn’t support that system, or you paid out of pocket, you can reimburse yourself through your HSA administrator:

Save the itemized receipt showing the product name, merchant, and date.
Log into your administrator’s portal and upload a digital copy.
Submit the claim for the eligible dollar amount.
Once approved, funds go to your linked bank account by direct deposit or check.

There is no deadline for reimbursing yourself from an HSA. You can pay out of pocket now and reimburse yourself months or years later, as long as the expense occurred after you opened the account and you keep the receipt.

Records You Need to Keep

The IRS requires you to keep records showing that HSA distributions went to qualified medical expenses, that those expenses were not reimbursed by insurance or another source, and that you did not also claim them as an itemized deduction.⁴

You don’t send receipts with your return, but you need them available if the IRS asks. Save itemized receipts showing product name, store, and date. Many retailers now mark HSA-eligible items on the receipt with a symbol or code. Keep records for at least three years after filing the return for the year the expense was paid, which matches the general federal statute of limitations for tax assessments.⁵

If you received any HSA distributions during the year, file Form 8889 with your federal tax return. Your administrator sends you Form 1099-SA showing total distributions, which you use to complete Form 8889.⁶

What It Costs If You Buy Something Ineligible

Using HSA money on a non-qualified purchase has two consequences. The amount is added to your taxable income for the year, and you owe an additional 20% tax on the distribution.⁴

The 20% penalty drops off after you turn 65, become disabled, or die (in which case the beneficiary handles the account). Non-qualified withdrawals are still taxed as ordinary income after 65, but the extra 20% no longer applies.⁶

Whose OTC Purchases You Can Cover

Your HSA can pay for qualified medical expenses, including OTC medicines, for more than yourself. Eligible family members include your spouse, anyone you claim as a dependent, and anyone you could have claimed as a dependent except for certain technical reasons such as the person filing a joint return or earning above the exemption amount.⁴

For divorced or separated parents, a child is treated as the dependent of both parents for HSA purposes regardless of which parent claims the exemption. Each spouse who wants an HSA must open a separate account. Joint HSAs do not exist.⁴

1
Office of the Law Revision Counsel. 26 USC 223 Health Savings Accounts
2
Internal Revenue Service. Frequently Asked Questions About Medical Expenses Related to Nutrition, Wellness and General Health
3
FSAFEDS. What Kind of Over-the-Counter Medicines or Products Are Eligible for Reimbursement Through My HCFSA?
4
Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
5
Office of the Law Revision Counsel. 26 USC 6501 Limitations on Assessment and Collection
6
Internal Revenue Service. Instructions for Form 8889 (2025)