Health Savings Accounts

A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. The contributions can be invested and grow tax-free, and the funds can be withdrawn tax-free to pay for qualified medical expenses.

HSAs are member-owned accounts that let you save pre-tax dollars for future qualified medical expenses. You can invest in mutual funds tax-free, and funds never expire.

HSAs offer several benefits such as lower health plan premiums, triple-tax savings, long-term savings, and the ability to roll over funds. However, they are only available to those with a qualifying health plan and have certain eligibility criteria.

If you have more questions about HSAs or need help with anything else, please let me know!

Contribution Limits

2024Under age 55Age 55 and over
Individual coverage$4,150$5,150
Family coverage$8,300$10,300*
*HSA Catch-up contribution for age 55 and older. Family HSA catch-up is limited to $1,000 per spouse over age 55 for plan years 2022 – 2024.
2023Under age 55Age 55 and over
Individual coverage$3,650$4,650
Family coverage$7,300$9,300*
HSA Catch-up contribution for age 55 and older. Family HSA catch-up is limited to $1,000 per spouse over age 55 for plan years 2022 – 2024.

    What are qualified medical expenses?

    Expenses that qualify for the medical- and dental-expense deduction meet the criteria. The main purpose of the expense must be to ease or prevent a physical or mental illness. The Internal Revenue Service (IRS) outlines qualified medical expenses in Publication 502, Medical and Dental Expenses.

    The IRS issued Announcement 2021-7 to help stop the spread of the coronavirus. This added personal protective gear used to prevent the spread of the coronavirus as qualified expenses. It also led to the following items qualifying as HSA-eligible expenses:

    • Masks
    • Hand sanitizer
    • Sanitizing wipes

    The Coronavirus Aid, Relief, and Economic Security (CARES) Act also added some other medical expenses to the list. The new items added were menstrual products and over-the-counter medications. 

    The following 18 items are examples of now-qualified medical expenses: 

    • Acne treatments
    • Allergy medication
    • Aspirin
    • Band-Aids
    • Breathing strips
    • Cold and cough medicine
    • COVID-19 tests
    • Eye drops
    • Heartburn medications
    • Ibuprofen
    • Liners
    • Menstrual cups
    • Nasal sprays
    • Pads
    • Period panties
    • Sleep aids
    • Tampons
    • Thermometers

    These are the most common HSA-expensed items

    The cost of healthcare is steadily rising. The area of healthcare that we spend the most money on depends on age, insurance coverage, location, and other variables. That is why we have the most common HSA-expensed items split into four categories for you below. 

    Some of the most common expenses included:

    • Copays for prescriptions and office visits
    • Crutches
    • Dental care (See below)
    • Flu shots
    • Hearing aids
    • Prescription medications
    • Vision care (See below)
    • Wheelchairs 
    • X-rays

    Common healthcare expenses for families with young dependents include:

    • Annual exams
    • Baby ointment
    • Breast milk storage bags and bottles
    • Breast pump
    • Childbirth
    • Diaper-rash cream
    • Immunizations
    • Nursing pads
    • Pedialyte

    There are family-planning healthcare expenses that your HSA can also pay for. Your HSA can also reimburse you if you forget to use it to pay for these 12 expenses:

    • Birth control pills
    • Condoms
    • Contraceptives
    • Fertility tests
    • Infertility treatments
    • Ovulation monitors
    • Pregnancy tests
    • Prenatal vitamins
    • Tubal ligation
    • Ultrasounds
    • Vasectomies
    • Vasectomy reversals

    Emergencies will arise in everyone’s life. These eight emergency medical expenses can also be covered by your HSA:

    • Ambulance services
    • CT scans
    • Emergency room visits
    • EMS devices
    • Hospital visits
    • Medical records fees
    • MRIs
    • Urgent care services

    Studies show that 1 in 5 adults experienced a mental illness in 2020. If you need to pay for mental health expenses out of pocket, your HSA may cover the following: 

    • Acupuncture 
    • Mental health counseling 
    • Psychotherapy 
    • Psychiatric care 
    • Transportation to mental health appointments 

    Are all qualified medical expenses HSA eligible?

    No. All qualified medical expenses are not HSA eligible. For example, insurance premiums may not always be considered a qualified expense. You can only use your HSA to pay for insurance premiums if they fall into one of these four categories:

    • Long-term care insurance
    • Healthcare continuation coverage (coverage under COBRA)
    • Healthcare coverage while receiving federal or state unemployment
    • Medicare and other health coverage if you are 65 and older

    An example of an insurance premium you cannot claim is Medicare supplemental insurance, such as Medigap.

    What dental and vision expenses are covered for HSA holders?

    HSA holders have the option to use their account for care given by an orthodontist, oral hygienists, dentist, or optometrist. This includes but is not limited to the following eight items:

    • Braces
    • Contacts
    • Dental cleanings
    • Dentures
    • Eyeglasses
    • Eye exams
    • Eye surgery
    • Orthodontist visits 

    Teeth whitening is not covered, since it is considered a cosmetic dental procedure and not health-related. 

    What common healthcare expenses are not HSA eligible?

    Preventative care that is not doctor prescribed is not always HSA eligible. Some examples of common healthcare expenses that fall into this category are:

    • Vitamins, nutritional, and herbal supplements for general health
    • Personal hygiene items such as toothpaste and deodorant
    • Weight-loss programs for general health or well-being

    But as with every rule, there is always an exception. If you have a doctor’s note — also called a letter of medical necessity (LOMN) — you may be able to buy items that typically wouldn’t be HSA eligible. The LOMN briefly outlines your condition and why you need a specific product or service. 

    The following are examples of four expenses that may qualify for the exception. These items may qualify if they are used to treat a medical condition. Before you purchase an item, you should check with your HSA administrator to determine if your expense is HSA eligible with a LOMN.

    • Fluoride toothpastes and rinses
    • Health clubs 
    • Vitamins
    • Weight-loss programs

    Do expenses for spouses and dependents go toward your HSA?

    You can pay for qualified medical expenses for your spouse with your HSA. You can also pay for the medical expenses of any dependents claimed on your tax return with your HSA, as long as they meet the following the criteria:

    • The dependent cannot file a married filing jointly (MFJ) return.
    • Their gross income does not exceed the annual threshold.
    • You and your spouse cannot be a dependent on someone else’s return.