HSA & Acne Treatments

HSAs provide tax relief for healthcare costs.

With changing healthcare rules and regulations, it can be hard to keep track of how different benefits can help you. In the case of Health Savings Accounts, it's often clear they help tax-shelter your money intended for healthcare costs, but how much latitude do they give you for reimbursement? The answer is quite a lot, actually. Luckily for those with skin problems, acne treatments are among the acceptable uses of an HSA.

Health Savings Accounts

A Health Savings Accounts allows you to set aside non-taxable money which you can later use to reimburse yourself for healthcare related costs.

You make contributions to your HSA in one of two ways. An individual may contribute by having their employer take payroll deductions and apply those to the HSA. In this case, the employer reduces your taxable earnings on your W-2 by the amount of the annual contribution.

Or, you may directly add funds to your HSA from whatever financial source your wish. At the end of the year, you may deduct the amount of your annual HSA contribution from your taxable income.

Maximums

Under Federal law, during fiscal year 2010, an individual with self-only insurance coverage may contribute an annual maximum of $3,050. For someone with family insurance coverage, the maximum is $6,150. These represent increases over previous years.

Reimbursements

In December, 2003 the Medicare bill created HSAs with the primary purpose of assisting those with high deductible insurance plans. However, HSAs can help all those who have co-payments, deductibles, and other out of pocket medical expenses where the individual has to pay before insurance kicks in. These can include HMOs, PPOs or indemnity plans.

HSAs are not available to those covered by Medicare. Also, having other health-related tax shelter programs like a Flexible Spending Arrangement or a Health Reimbursement Arrangement can make an individual ineligible for an HSA.

Acne

The costs of Acne treatment are reimbursable from an HSA. However, a doctor's note or prescription must be present along with the receipts from he treatment products. A typical example is Retin-A, a commonly used prescription acne medication. In most cases, acne laser treatment is also reimbursable.

Make sure to check with your HSA administrator for specific rules. There are variations between companies.

Distributions and Over-the-Counter Items.

When filing for a reimbursement or distribution from your HSA administrator, it's important to have a receipt. Most administrators will require this before they release the money to you. However, under federal regulations, they don't have to have the receipt--you do. So, it's wise to have it on hand in case you ever face an audit of your HSA.

Also, HSA rules now allow over the counter pharmaceutical and healthcare items. These may include everything from bandages to antacids--generally whatever you might buy in a drugstore. Any over the counter acne treatment products such as topical cleansing pads would also qualify for HSA distribution.

References

• US Treasury on HSA's
• US Treasury on 2010 Limits
• BenefitPlans.com
• CIGNA HSA