FSA and HSA Shopping and Eligibility

Determining eligibility is a key part of using an FSA or HSA. What you can use an HSA or FSA for varies by plan, item, and medical need. Eligibility is always plan-dependent and tied to a medical purpose, making some items eligible for some people but not eligible for others. These are considered “borderline” items, which may need more documentation for your medical provider to explain why an item serves a medical purpose. Learn more about what you can buy with an HSA or FSA and how to use our quick workflow guide to check eligibility while shopping.

Both a health savings account (HSA) and a flexible spending account (FSA) allow you to use pre-tax dollars to cover qualified medical expenses, and FSA/HSA eligible items and services. According to the IRS, qualified medical care expenses alleviate and prevent physical ailments and mental illness.

There are some key differences between HSAs and FSAs. Only individuals who are enrolled in a high-deductible health plan (HDHP) can open an HSA. HSA funds carry over year-to-year, and the account is owned by you, not an employer. FSAs are a workplace benefit plan tied to your employer. Unused funds are rarely carried over at the end of the year. The forfeited funds go back to your employer.

When you’re using an HSA or FSA card, some items may auto-approve at checkout. Other FSA- and HSA-eligible items may require supporting documentation, like a letter of medical necessity (LMN) from a licensed practitioner. Some plans might differ in what they allow and how they verify eligibility for reimbursement. Ultimately, HSA/FSA eligibility depends on the item, if it serves a medical purpose, and if there is sufficient supporting documentation.

Shopping for FSA/HSA-eligible items doesn’t need to be complicated. Here is a step-by-step checklist to help you make the most of every shopping list.

Identify the health needs the item supports. Every purchase must serve a medical purpose. Learn more about the item to understand which medical issues the product addresses. Look for medical-use wording in the product description.

Double-check your plan for eligibility contingencies. Different HSA and FSA plans differ in their scope of eligibility.

Look for eligibility signals on the product. This includes medical-use language on the retailer label stating the item as FSA-/HSA-eligible. Also, many coverage plans have an online list of products or categories that are automatically covered under the plan.

At checkout, separate eligible and non-eligible items. When using an FSA or HSA card, try to group eligible items in one cart and “borderline” or non-eligible items in another. This can help minimize declines, making reimbursements easier.

Choose how to pay. Pay with your HSA or FSA card directly for items your plan may auto-approve at checkout, or pay with a personal card and submit receipts for reimbursement later.

Save the documentation immediately. Take a photo or scan a PDF of the itemized receipt to ensure you have it on hand should you need it.

If you’re unsure, err on the side of caution. Be conservative with your purchases and choose the safe option that you’re confident is eligible. Work with your care provider to prepare extra documentation to back up your purchase and support the claim for eligibility.

Just because an item is considered “healthy” doesn’t make it FSA/HSA eligible. This means that some wellness supplements, for example, do not qualify unless determined by a doctor to be medically necessary to treat, prevent, cure, or mitigate a health condition. Remember: The purchase must serve a medical purpose. While store “eligible” tags could be a helpful indicator, final reimbursement decisions are ultimately up to plan administrators.

Another common mistake is checking out with a mix of eligible and non-eligible items. Mixed carts lead to confusing itemized receipts that could lead to card declines or reimbursement delays. When printing a receipt, always ensure the receipt is itemized and clearly lists the product names, price, merchant, and date.

When purchasing products in a foreign country or those with ambiguous or multilingual labelling, take a photo of the items and submit the images with the receipt. Note that some medications or products in one country may require a prescription, while in others they do not. Gather and submit all the relevant medical support documentation to facilitate speedy reimbursements and approvals.

In-Store Shopping: Look for medical-use focused products along with eligibility labels to guide browsing. An HSA or FSA card might decline or partially-approve for mixed carts or items that aren’t automatically pre-approved.

Fast fix:

• If you’re purchasing a borderline item, purchase and submit for reimbursement with documentation.
• Separate mixed carts and purchase eligible/non-eligible items in different transactions.

Online Shopping: Filter through FSA- and HSA-eligible categories when shopping online. Minimize reimbursement issues by saving a clean invoice or order confirmation that reflects an itemized list with the date, cost per item, and product name.

Fast fix:

• Save PDFs or screenshots of invoices and order confirmations
• Have all supporting documentation ready for borderline items
• Separate mixed carts

Mixed Carts: The best practice is to separate all FSA/HSA-eligible purchases into a single transaction; purchase all other items in a separate transaction. Organizing shopping this way minimizes complications with card approvals and reimbursement receipts.

Returns or Exchanges: If you’re making a return or exchange, keep all receipts and documents for your records. Follow the money. Ensure the refund goes to your FSA or HSA account, not your personal account. Check that all balances are correct, including that your annual contribution limit reflects the amount spent. Keep all receipts in case of any discrepancies.

Borderline items are items that may be FSA- and HSA-eligible depending on the medical purpose and your plan’s rules. Some items will be pre-approved at check-out, like pharmacy prescriptions. Others can be unlocked as eligible with an LMN or prescription.

Vitamins and supplements, for example, are tricky. With the exception of prenatal vitamins, these kinds of items are typically not automatically HSA or FSA eligible. However, if medically directed by a qualified physician or care provider, and supported by an LMN outlining a medical purpose, these items may be considered eligible. Fitness devices and health technology also vary. General-purpose items may have a medical-purpose version that would be eligible for coverage (e.g., a general hand-held massage gun might not be eligible, but a therapeutic massager for chronic pain, arthritis, or injury recovery might be, with documentation).

Proper documentation is key when shopping for FSA- or HSA-eligible items. Keep itemized receipts indicating the purchase date, merchant, product name, and amount. For borderline items, have a prescription or LMN ready outlining the medical purpose. For reimbursement requests, submit the documentation with the claim. When using a card, hold onto the documentation in case it’s requested or the transaction declines.

Don’t “double-dip” and try to get reimbursed for an item that may already be covered under another health insurance plan. Reconcile any returns or exchanges, ensuring the correct funds go back into your FSA or HSA, so records stay accurate. Some plans allow coordination with your health insurance so uncovered services or items may be submitted for HSA/FSA consideration. Eligibility is always contingent on your plan policy: administrators make final decisions on reimbursement.

Truemed* simplifies shopping for HSA/FSA-eligible items for qualified individuals. Qualified customers may be able to use their HSA or FSA funds for certain products, depending on medical need and plan rules. When you shop the Truemed marketplace for often-eligible items, you’ll complete a clinical intake form at checkout that will be reviewed by an independent licensed practitioner who will issue an LMN if appropriate. Plan administrators make the final decisions on reimbursement, so save all receipts and LMNs.

*Truemed is for qualified customers. See terms at truemed.com/disclosures.