What Can HSA Money Be Used For? Eligible Expenses and Limits

HSA money can be used, tax-free, for a wide range of qualified medical expenses: doctor visits, prescriptions, dental and vision care, mental health treatment, medical equipment, travel to get care, some home modifications, and a narrow list of insurance premiums. The IRS defines qualified medical expenses as costs for diagnosing, treating, or preventing disease, or for affecting any structure or function of the body, and the expense must not be reimbursed by insurance or any other source.¹ Spend the money on something else before age 65 and you owe income tax on the withdrawal plus a 20% additional tax.²

Medical Care and Treatment

The everyday stuff is covered. Office visits with your primary care doctor or specialists, surgery, lab work, X-rays, annual physicals, and immunizations all qualify as long as insurance or another source hasn’t already reimbursed you.

Dental care is fully eligible: cleanings, fillings, crowns, orthodontia, root canals, and dentures. Vision care is too, including comprehensive eye exams, prescription glasses, contact lenses, and corrective laser eye surgery.³ These often catch people off guard because traditional health insurance covers them poorly, if at all.

Mental health and behavioral health services qualify in full. Therapy with a licensed psychologist or psychiatrist, inpatient psychiatric care, and addiction treatment programs for substance use or alcohol use disorders all count.⁴ General marriage counseling does not qualify unless it involves treatment for a diagnosed mental health condition.

Less obvious services that qualify include acupuncture, chiropractic care, ambulance fees, and the cost of artificial limbs or teeth.³

Prescriptions, Over-the-Counter Items, and Equipment

Prescription drugs are almost always eligible. Since the CARES Act, over-the-counter medications like pain relievers, allergy pills, antacids, and cold medicine also qualify without a doctor’s prescription.⁵ Insulin has always been eligible regardless of prescription requirements. Birth control pills prescribed by a doctor are eligible, along with contact lens solution, reading glasses, and Braille books and magazines to the extent their cost exceeds regular printed editions.³

Home medical supplies and equipment are covered too. Bandages, crutches, hearing aids, breast pumps and supplies, blood pressure monitors, and glucose monitors all qualify. Menstrual care products became eligible under the CARES Act. The IRS has confirmed that condoms count as a medical expense, and sunscreen with SPF 15 or higher and broad-spectrum protection is also eligible.⁶

Travel and Lodging for Medical Care

Getting to and from treatment counts. For 2026, you can deduct 20.5 cents per mile driven for medical purposes.⁷ Parking fees and tolls at a hospital or clinic qualify. So do bus, taxi, train, and ambulance fares to get care.

When you have to travel away from home for treatment, lodging is covered up to $50 per night per person. A parent traveling with a sick child can claim up to $100 per night for the two of them.³ The lodging can’t be lavish or extravagant, and the trip can’t have any significant element of personal pleasure or recreation. Meals during medical travel are not covered.

Home Modifications for Medical Needs

If a medical condition requires changes to your home, some or all of the cost qualifies. Common examples include wheelchair ramps, widened doorways, grab bars, lowered cabinets, and stair lifts. You can only claim the portion of the cost that exceeds any increase in your property’s value.

The IRS worksheet is straightforward: subtract the home’s value before the improvement from its value after, then subtract that increase from what you paid. What’s left is your medical expense.³ If the improvement doesn’t raise your property value at all, the full cost qualifies. An entrance ramp rarely adds market value to a home, so the entire amount would typically be eligible.

Insurance Premiums: The Narrow Exceptions

You generally cannot use HSA funds to pay health insurance premiums. The tax code carves out four exceptions.²

COBRA continuation coverage if you lose your job and elect it.
Any health plan premiums paid while you’re collecting unemployment benefits.
Qualified long-term care insurance, subject to age-based dollar limits. For 2026, those limits range from $500 for people age 40 and under to $6,200 for those over 70.
Medicare Part A, Part B, Part D, and Medicare Advantage premiums once you turn 65. Medicare supplemental (Medigap) policies do not qualify.

Regular employer plan premiums, marketplace plan premiums, and Medigap premiums remain ineligible no matter your age.

Paying for a Spouse or Dependent

Your HSA can cover qualified medical expenses for your spouse, even if your spouse has a different insurance plan or no high-deductible plan at all.¹ The same applies to anyone you claim as a dependent on your federal tax return: usually children under 19 (under 24 if they’re full-time students), plus other relatives you support financially by more than half.

The dependency relationship under the tax code is what matters, not whether the person is on your health plan. A child covered by an ex-spouse’s insurance can still have unreimbursed bills paid from your HSA if you claim them as a dependent. Aging parents can qualify if you provide the majority of their support. Check dependency status carefully, because a withdrawal for someone who doesn’t meet the IRS definition is treated as a non-qualified distribution.

What HSA Money Cannot Cover

The IRS draws a hard line between treating a medical condition and improving general wellness. Expenses that are merely beneficial to overall health, rather than targeting a specific condition, do not qualify.⁴

Cosmetic surgery is explicitly excluded unless it corrects a deformity from a congenital abnormality, a personal injury from an accident, or a disfiguring disease.¹ Teeth whitening, elective facelifts, and liposuction for appearance all fail the test. Breast reconstruction after a mastectomy does qualify, because it addresses a disease-related condition.³

Other common ineligible expenses: gym memberships, general-purpose vitamins and supplements (unless prescribed for a specific deficiency), toiletries, most cosmetics, and funeral or burial costs. For a borderline expense, the safest step is to get a letter of medical necessity from your doctor before paying with HSA funds.

What Happens If You Use It for Something Else

Pull money out for a non-qualified expense before age 65 and you owe income tax on the withdrawal plus a 20% additional tax.² On a $1,000 non-qualified withdrawal in the 22% federal bracket, that’s $220 in income tax plus $200 in penalty.

After age 65, the 20% penalty disappears. Non-medical withdrawals still count as taxable income, but without the surcharge, the account functions much like a traditional IRA. The penalty is also waived if you become disabled or if the distribution occurs after the account holder’s death.² Even after 65, using HSA money for medical costs remains the most tax-efficient option, since those withdrawals stay completely tax-free.

A useful feature to know: there is no deadline to reimburse yourself. You can pay a medical bill out of pocket today, keep the receipt, and withdraw the money from your HSA years later, tax-free, as long as your HSA was already open when the expense occurred.⁶ The tax-free treatment attaches to when the expense was incurred, not when you take the distribution. Recordkeeping matters here: save receipts showing the provider or merchant, the date, a description of what was provided, and the amount paid. The records also need to show the expense wasn’t reimbursed elsewhere and wasn’t claimed as an itemized deduction on a prior return.

If you accidentally use your HSA debit card for a non-qualified expense, you may be able to return the money without tax consequences under the IRS “mistaken distribution” rule, provided there’s clear evidence of a genuine mistake of fact.⁸ The deadline to repay is April 15 following the first year you knew or should have known the distribution was a mistake. Custodians aren’t required to accept these returns, so check your custodian’s policy first. Swiping the HSA card for clearly non-medical purchases like groceries doesn’t qualify as a mistake of fact.

1
Office of the Law Revision Counsel. 26 U.S. Code 213 – Medical, Dental, Etc., Expenses
2
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
3
Internal Revenue Service. Publication 502 – Medical and Dental Expenses
4
Internal Revenue Service. Frequently Asked Questions About Medical Expenses Related to Nutrition, Wellness and General Health
5
Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act
6
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
7
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile
8
Internal Revenue Service. Form 1099-SA – Distributions From an HSA, Archer MSA, or Medicare Advantage MSA