How To Spend HSA Funds

Establishing an HSA account helps to make health and wellness-related spending more affordable. You’re allowed to utilize tax-free money to make eligible purchases of goods and services you need to stay healthy. If you have an HSA account, here’s what you need to know about how to spend HSA money and what types of purchases are eligible. 

What Can You Spend HSA Funds On?

HSA money can be used for a lot of healthcare-related expenses. Most of the things you use every day, including the things you use to stock your first aid kid and medicine cabinet, are HSA eligible. Your HSA can also cover formal medical expenses.

Medical Visits and Prescription Costs

Most people use HSA funds to cover co-pays for medical visits and prescription costs. You can even use your HSA to cover costs for visits to the dentist or the optometrist, even if your insurance doesn’t include dental care. All prescription co-pays are also generally covered by HSA funds.

Necessary Medical Equipment

Your HSA money will generally cover any necessary medical equipment. Any medical equipment that a doctor prescribes, recommends, or is necessary to treat or manage a disease would be considered necessary medical equipment. 

Examples include:

• Wheelchairs
• Crutches
• Prescription orthotics
• Dentures
• Glasses
• Contact lenses and contact care supplies
• Hearing aids 
• Diabetes equipment (like testing strips, meters, and insulin syringes) 

Disability Accommodations

Any accommodation made for someone with a disability can typically be at least partially covered by HSA funds:

• Adding ramps or lifts to your home or your car
• Installing accessible tubs or showers in your home
• Adaptive controls to make a vehicle drivable for someone with a disability
• The cost difference between a braille book and a print book

Over-the-Counter Medicines

Any medicine you buy over the counter is HSA eligible. This list doesn’t cover everything — it’s just the most common over-the-counter meds people pick up with their HSA funds.

HSA funds may cover:

• Antacids
• Pain relievers
• Anti-inflammatory medicine
• Nausea and diarrhea medicine
• Cold and flu medicines
• Antihistamine and anti-allergy medicine
• Cough drops and vapor rub 
• Nasal spray 
• Topical pain relieving balms

First Aid Supplies

HSA funds will generally cover anything you need to use to treat a minor wound at home, such as:

• Premade first aid kids
• Bandages, medical tape, and gauze
• Wound sanitizing sprays and wipes
• Medicated healing ointments
• Burn relief products
• Insect bite relief products

Reproductive Health and Pregnancy Supplies 

HSA funds comprehensively cover reproductive health costs, including menstrual supplies. Other covered items include: 

• Condoms
• Spermicide
• Emergency contraception
• Birth control
• Pads, tampons, and menstrual cups
• Breast pumps and lactation pads
• Medicated vaginal ointments 

What Can You Spend HSA Funds On With Doctor Approval?

Medicine is more than just prescriptions and things you can buy in the pharmacy aisle of your local big box store. If your doctor believes that something is medically valuable to you and HSA money doesn’t cover it outright, your doctor can write you something called a Letter of Medical Necessity (LMN).

A Letter of Medical Necessity can expand your HSA’s horizons to encompass health and wellness goods and services outside of its normal scope. 

Physical Fitness and Gym Memberships

Exercise is medicine. Your doctor will likely agree that you would benefit from more exercise, and a doctor’s note can make it easier to use your FSA money to pay for your physical fitness routine.

The following may be covered by HSA funds:

• Health and wellness coaching services
• Fitness tech and trackers
• Gym memberships
• Home workout equipment 

Healthy Foods and Supplements

Health begins with food. Poor diet and obesity can contribute to a wide range of ailments, and your HSA can make it easier and more affordable to make healthier decisions about what you consume.

The following may be covered by HSA funds:

• Bone broth
• Vitamins
• Supplements
• Protein powder 
• Healthy meal delivery services

Saunas and Cold Plunges

Saunas, hot tubs, and cold plunges aren’t luxuries — they have a positive impact on both mental and physical health by helping to relieve stress throughout the mind and body. They can also play an active role in recovering from an injury, surgery, or a rigorous workout routine.

Healthy Home Devices

The air you breathe significantly impacts your overall health. Keeping the air around you clean can reduce your exposure to allergens and pollutants.

Air purifiers and humidifiers, for example, may be eligible for you to use your HSA funds. 

Sleep Care

We all need seven to nine hours of sleep a night. If you aren’t getting enough sleep or if you’re getting poor quality sleep, you can invest your HSA money into a good night’s rest with:

• Sleep tracking devices
• Special pillows
• Special mattresses 

Mental Health Aids 

Mental health and physical health are strongly intertwined. A Letter of Medical Necessity can help you unwind naturally with mental health support products and services:

• Breathing devices for stress and anxiety
• Mental health coaching and support services
• Meditation and mindfulness devices

Homeopathy and Aromatherapy

Natural remedies like aromatherapy have been proven to be effective in relieving mental and physical stress. If you prefer to go the natural route, speak to your doctor about a Letter of Medical Necessity. The following items may be eligible:

• Essential oils
• Diffusers
• Homeopathic remedies 
• Alternative wellness practitioners

How To Spend HSA Funds

Spending your HSA money doesn’t have to be much different from spending money from your personal bank account. The most important distinction is that you need to keep excellent records of your spending to prove that you used your HSA money appropriately.

First Things First: Keep Your Receipts and Letters of Medical Necessity

The most important aspect of shopping with HSA funds is recordkeeping — make sure to keep every receipt for every HSA purchase you make. If you were able to purchase something with HSA money because you received a Letter of Medical Necessity, your LMN is just as important as your receipt, so it’s best to store the two together.

When it comes time to do your taxes, your receipts and your transaction history will work together to prove that you used your HSA money for its intended purpose. If you don’t have your receipts or your Letter of Medical Necessity for every purchase you made, you can get hit with a 10% tax penalty on the HSA money you spent. Don’t make a costly error. 

Spend HSA Funds With Your HSA Debit Card

Most financial institutions and insurance companies that offer HSA accounts will issue account holders debit cards linked to their HSA funds. You can use this debit card just like you’d use any other debit card, but you need to be careful that you’re only using it for HSA-eligible purchases. 

The only issue with using your HSA debit card is that only a handful of merchants allow people to directly use HSA funds to make a purchase. Truemed offers a simple HSA/FSA payment processing integration solution for retailers who want to make it easier for their customers to manage their health and wellness needs.

Reimburse Yourself for HSA Purchases

Since many retailers don’t accept direct HSA payments, most people pay for HSA-eligible goods and services with their own money. You can use your receipts to reimburse yourself from your HSA account. You can write yourself a check from your HSA account, withdraw the cash, or electronically transfer the money to your personal account.

The reimbursement process can be complicated. It may not be worth it to reimburse yourself every time you make a purchase. That’s a lot of effort for a $4 bottle of ibuprofen. You can wait until you reach a certain dollar amount (like $100) and reimburse yourself in batches. 

There is no time limit for reimbursements. You can wait as long as you’d like as long as you keep your HSA account open and in good standing. Some people save their receipts and wait to reimburse themselves in full at the end of the year. 

Spending HSA Funds Doesn’t Need To Be Difficult

There are plenty of vital purchases you can make outright with HSA money. There’s an expanded list of possibilities if your doctor agrees with your decision and provides you with a Letter of Medical Necessity. It’s easy to make an HSA purchase directly from a merchant that uses Truemed for HSA/FSA payment processing. There’s no reimbursement to worry about.

At Truemed, we’re on a mission to simplify HSAs. The process of using your HSA funds is simple with us — just choose “Pay With Truemed” at checkout with one of our merchants, and enter your payment details. 

We’ll ask you a few questions about your health circumstances, and you’ll be matched with a provider to determine your eligibility. If you qualify, you’ll get a Letter of Medical Necessity, which will allow you to use your HSA or FSA funds to complete your purchase — because health and wellness should be accessible.

Sources:

Cardiovascular and Other Health Benefits of Sauna Bathing: A Review of the Evidence | Mayo Clinic Proceedings

How many hours of sleep are enough for good health? | Mayo Clinic

The relationship between physical and mental health: A mediation analysis | PubMed

Aromatherapy: Do Essential Oils Really Work? | Johns Hopkins Medicine