According to the IRS, medical expenses are defined as “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” HSA funds can be used to pay for a wide range of these qualified medical expenses, including deductibles, copays, coinsurance, and other healthcare costs.
Recent legislation has expanded what qualifies:
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COVID-19 testing and treatment: Under IRS Notice 2020-15, High-Deductible Health Plans (HDHPs) will not lose HSA eligibility if they cover COVID-19 testing and treatment before the deductible is met.
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Feminine hygiene products: The CARES Act (2020) expanded eligible expenses to include products such as tampons, pads, liners, cups, and sponges. This applies to purchases made on or after January 1, 2020.
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Over-the-counter (OTC) medications: The CARES Act also allows HSA funds to be used for OTC products without a prescription or Letter of Medical Necessity (LMN). Examples include pain relievers (acetaminophen, ibuprofen), cold and allergy medicines, and other common OTC drugs.
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Telehealth services: The CARES Act temporarily expanded HSA eligibility to include telemedicine and Telehealth visits beginning March 27, 2020, for plan years starting before December 2021.
For the most up-to-date list of eligible expenses, you can use Lively’s What’s Eligible Tool or review IRS Publication 502.
Updated: