What Are Qualified Medical Expenses for an HSA?

Qualified medical expenses for a Health Savings Account are the costs the IRS treats as “medical care” under Section 213(d): amounts you pay to diagnose, treat, prevent, or mitigate disease, or to affect a structure or function of the body. That covers a lot — doctor visits, prescriptions, dental and vision care, most over-the-counter medicines, medical equipment, and transportation to appointments — plus a short list of insurance premiums. Spend HSA money on anything outside that definition and you owe income tax on the withdrawal, plus a 20% penalty if you’re under 65.

The Rule That Decides Every Question

Every HSA expense question runs through Section 213(d) of the Internal Revenue Code, which defines medical care as amounts paid for the diagnosis, treatment, prevention, or mitigation of disease, or for the purpose of affecting any structure or function of the body.¹ It also covers transportation that is primarily for and essential to medical care.

The line the IRS draws is between treating a specific condition and improving general health. Physical therapy after knee surgery qualifies. A gym membership because exercise sounds like a good idea does not. Most disputes live on that line.

Services, Prescriptions, and Equipment

The clearest qualified expenses are professional medical services: office visits, hospital stays, surgeries, lab work, diagnostic imaging, and nursing care. Prescription medications qualify. So do specialized treatments including psychiatric care, psychoanalysis, acupuncture, and inpatient substance abuse treatment for alcohol or drug addiction.² Hearing aids, including batteries and repairs, are covered.

At-home medical equipment counts too: blood sugar monitors, wheelchairs, crutches, and similar devices. Transportation costs to and from medical appointments qualify, including mileage, parking, and tolls when the trip is primarily for medical care.¹

Over-the-Counter Products

Before 2020, over-the-counter medicines only qualified with a prescription. The CARES Act removed that requirement permanently, so pain relievers, cold medicine, allergy treatments, and antacids can be paid from your HSA without a doctor’s note.³ The same law added menstrual care products — tampons, pads, liners, cups, and similar items — to the qualified list. First-aid supplies like bandages qualify too.

Dual-purpose items are trickier. A mattress topper marketed for back pain isn’t automatically qualified. For products that could serve either a medical or a general comfort purpose, a letter of medical necessity from your doctor identifying the diagnosis and explaining why the specific item is needed can make the expense qualified. Without that letter, expect the IRS to treat it as non-qualified.

Dental and Vision

Dental care qualifies when it prevents or treats dental disease: cleanings, X-rays, fluoride, fillings, braces, extractions, and dentures.² Teeth whitening is cosmetic and does not qualify.

For vision, eye exams, prescription eyeglasses, contact lenses and supplies, and corrective surgeries like LASIK are all eligible.² Prescription sunglasses qualify. Non-prescription sunglasses do not.

Insurance Premiums That Qualify

Most health insurance premiums cannot be paid from an HSA. Four categories are the exceptions:⁴

COBRA continuation coverage after leaving a job.
Health coverage while you are receiving unemployment compensation.
Long-term care insurance, up to an age-based annual limit.
Medicare Parts A, B, and D premiums once you turn 65. Medigap and Medicare Supplement policies are specifically excluded.

Marketplace plans and employer-sponsored coverage do not qualify. Paying those from an HSA triggers income tax and the 20% penalty.

Paying for a Spouse or Dependent

Your HSA covers more than your own bills. Distributions are tax-free for qualified medical expenses of your spouse or any tax dependent, and the IRS also extends this to anyone who would qualify as your dependent except that they filed a joint return, had too much gross income, or you yourself could be claimed on someone else’s return.⁴⁵

For divorced or separated parents, a child is treated as the dependent of both parents for HSA distribution purposes, regardless of who claims the child on their tax return. Married couples cannot share a joint HSA. Each spouse who wants one must open their own account, even under the same high-deductible plan, though either account can pay the other spouse’s qualified expenses.

Home Modifications for a Medical Condition

Home changes that accommodate a disability or medical condition can qualify. The IRS specifically lists wheelchair ramps, widened doorways, bathroom grab bars, stairway modifications, porch lifts, lowered kitchen cabinets, and modified fire alarms as examples that generally do not increase a home’s value and can be counted in full.²

If the improvement does add value — an elevator is the classic example — only the portion of the cost above the increase in property value qualifies. A $10,000 modification that raises home value by $4,000 leaves $6,000 as a qualified medical expense. Aesthetic upgrades or personal-preference choices don’t count.

What Does Not Qualify

The IRS draws a firm line at general wellness spending. The expenses that catch people most often:

Gym memberships, unless purchased solely to treat a specific diagnosed condition such as obesity, hypertension, or heart disease, or under a prescribed physical therapy plan.⁶
Daily multivitamins and general-health supplements, even if a doctor recommends them informally.
Cosmetic procedures — face lifts, hair transplants, electrolysis, liposuction, teeth whitening — unless correcting a congenital abnormality, accidental injury, or disfiguring disease.²
Weight-loss programs, unless treating a physician-diagnosed disease such as obesity or diabetes.⁶
General exercise classes — swimming lessons, dance classes — even with a doctor’s recommendation, because the IRS treats them as general health improvement.

The pattern holds across the whole list: if the primary purpose is treating or preventing a diagnosed condition, it qualifies. If the primary purpose is feeling better or looking better in a general sense, it doesn’t.

When the Expense Must Occur

Two timing rules matter, and most people know only one.

First, you cannot use HSA funds for expenses incurred before your HSA was established. The medical condition or the health plan being in place earlier doesn’t matter; the expense itself must occur after the account exists.⁴ State law determines exactly when an HSA is established, so the effective date can vary.

Second, there is no deadline for reimbursing yourself. Pay a bill out of pocket this year, let the HSA grow tax-free for a decade, and reimburse yourself later — as long as the expense was incurred after your HSA existed and you kept the receipt. The catch is documentation: if you plan to reimburse an expense years from now, keep the original receipt for the entire stretch.

If You Use the Money for the Wrong Thing

Withdraw HSA funds for something that turns out not to be qualified and you can return the money to avoid both the income tax and the 20% penalty. The repayment must be made no later than April 15 following the first year you knew or should have known the distribution was a mistake.⁷ The returned amount doesn’t count as a new contribution.

If you don’t correct it, the distribution is added to your taxable income for the year, and you owe an additional 20% penalty reported on Form 8889.⁴ The 20% penalty goes away once you turn 65, become disabled, or die. After 65, non-qualified withdrawals are still taxed as ordinary income, but there is no additional penalty — the HSA effectively works like a traditional retirement account for non-medical spending at that point.

Records You Have to Keep

Record-keeping sits with you, not your HSA trustee. You need documentation showing that each distribution paid for a qualified medical expense, that the expense wasn’t reimbursed from another source (such as insurance), and that you didn’t also claim it as an itemized deduction.⁴ You don’t file these with your return, but you need them if the IRS asks.

Useful records include itemized receipts with the date of service, provider name, description, and amount, along with Explanation of Benefits statements from your insurer. If you plan to reimburse expenses years after paying them, a dated digital archive of scanned receipts protects the tax-free status of those future withdrawals.

State Tax Treatment

Nearly every state follows the federal tax treatment of HSAs. California and New Jersey do not. In those two states, HSA contributions are treated as taxable income for state purposes, and earnings inside the account are also taxed at the state level. The full federal tax benefit still applies; the state-level break does not.

1
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
2
Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
3
Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act
4
Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
5
Internal Revenue Service. Instructions for Form 8889
6
Internal Revenue Service. Frequently Asked Questions About Medical Expenses Related to Nutrition, Wellness and General Health
7
Internal Revenue Service. Distributions for Qualified Medical Expenses (Continued)