Hopefully, you’ve been enjoying good health for several years now, and your family members have as well. If you’ve enrolled in a high-deductible health insurance plan that’s HSA-qualified, I hope you’ve been taking advantage of the tremendous tax benefits afforded by these plans and socking away the maximum amount allowable – $3,350 for an individual and $6,750 for a family – and watching as the money grows tax-free.
But sooner or later we’ll all have some medical expenses, no matter how healthy we stay. And depending on how significant the costs are, you might start thinking about withdrawing some of those HSA funds to use to pay your “qualified” expenses.
If you’ve never used your HSA funds, and even if you have, you might have questions about just how that money can be spent. And you want to be sure that you use them correctly, because if you don’t, and you get audited, the IRS can surely penalize you.
So let’s review HSA-qualified expenses. HSA funds can be used to pay for a variety of health-related expenses that might not be covered by your regular insurance plan, including ambulance transportation, artificial limbs, acupuncture, chiropractic care, hearing aids, lead paint removal, optometry (eye exams and glasses), orthodontia (currently, I’m using HSA funds to pay for my son’s braces), smoking cessation programs, and weight loss counseling.
There’s a complete list here, for your reference.
But before you decide to go ahead and “roll the dice” and just HSA funds for an expense that isn’t on the list, remember that we’re talking about the federal government here, so of course there is also a corresponding list of things that you can’t use HSA funds for, including athletic club membership, bottled water, cosmetic surgery, diaper service, premiums for health insurance (other than COBRA plans), and special foods or beverages to treat a health condition.
Check out the list of non-qualified expenses here.