What Can Be Paid From an HSA?


The cost of comprehensive health care has been on the rise for a number of years, as of 2011. Individuals must often get creative and jump many hurdles to afford adequate medical care for themselves and their families. In 2004, the United States government passed legislation designed to make it easier for under-insured Americans to afford adequate health care. The federal government created the Health Savings Account (HSA), a type of account specially designed for funding health care services.

What Is an HSA?

An HSA is a tax-protected health savings account, which is a type of investment account designed by the federal government as a safety net for individuals whose health care coverage carries a very high deductible. A deductible is the amount a policyholder must pay out of pocket for medical expenses before the insurance policy begins to pay for services and medication. You can make contributions to HSAs with your pre-tax dollars. Your investment sits in your account collecting interest. There is no tax penalty or fee for withdrawing funds to pay for qualified medical expenses.

Qualified Medical Expense

Under federal law, you must use your HSA funds exclusively to pay for health care expenses your health insurance doesn't cover. The federal government has compiled a long and detailed list of health care expenses for which HSA withdrawals are eligible.These expenses are known as qualified medical expenses. If you withdraw funds from your HSA for other expenses before you retire, your investment will no longer be tax-exempt and may incur additional early withdrawal fees.

Eligible Medical Services

You may use your HSA funds to pay for all visits to any primary care providers, physicians or medical specialists, regardless of whether you have referrals for these specialists. Visits to dentists, chiropractors, orthodontists, vision specialists and even some alternative medicine providers are also eligible as qualified medical expenses. Visits to the emergency room, surgeries and most major medical therapies carried out in a medical facility by a licensed health care provider are also eligible. You can use your HSA funds to pay for OB/GYN services, as well as prenatal, perinatal and neonatal services for both the mother and the newborn. Most routine checkups and preventive services, such as a mammography and pap smear, also qualify, as do radiography, ultrasound and other technical medical services. Most mental health care is eligible as a qualified medical expense for HSA withdrawals.

Eligible Medications

All medication and medical devices prescribed by a licensed health care provider qualify as eligible medical expenses you can pay for with your HSA money. This includes vitamins and over-the-counter medication, as long as you purchase them with a prescription. Vaccines and any medication you may require during a hospital stay are all eligible withdrawal candidates. In addition to prescription drugs and medication, you may also use your HSA funds to pay for medically prescribed prosthetics and assistive devices, such as a hearing aid, wheelchair or crutches.

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