Qualified
Medical Expenses
The
main purpose of your HSA is to enable you to pay for qualified
medical expenses with tax-free dollars. Qualified
medical expenses are defined under Section 213 of the
IRS Code (See IRS
Publication 502: Medical and Dental Expenses).
Most people remember to pay for doctor visits and prescription
drugs from their HSA (or save the receipts and reimburse
themselves later), but there are many medical expenses
that people simply pay for, without realizing that because
they own an HSA the expense is tax deductible. These
are the most common:
Over-the-counter
medications. Remember, your medicine does not
necessarily have to be prescribed to be considered a qualified
medical expense. Any time you buy a bottle of aspirin,
cough syrup, bandages, or zit medicine for your teenager
- save the receipt, so you can reimburse yourself from
your HSA.
Dental
expenses. Dental fees are typically the most
expensive item that people forget to pay for from their
HSA. From cleanings, to crowns, to dentures, all
of your medically necessary dental work is eligible to
be paid from your HSA.
Eye
glasses and contacts. Just last week I went
in for my annual eye exam. I got a new pair of glasses,
a year's worth of contact lenses, and a bill for about
$650. I paid for it all with my American Express,
but the receipt went in my HSA file and at some point
I will reimburse myself tax-free. Also, remember
that prescription sunglasses are also considered
to be a qualified medical expense.
Physical
Therapy
A
few years ago, before I had an HSA, and before I really
knew how to snow-board, I had a terrible fall as I was
boarding down a slope at Vail, and must have landed on
my shoulder at 30 miles an hour. The doctor couldn't
do much for me, but he did recommend that I have physical
therapy. I think I paid $75 per session, for about
20 sessions.
Physical
therapy. Most individual and family health insurance
plans have very limited coverage for physical therapy,
and that includes the coverage I had for myself.
So I paid those expenses out of pocket - if it were to
happen again, I now have HSA funds available.
Medical
massage therapy. Yes, you can use funds from
your HSA to pay for a massage, as long as your health
care practitioner recommends it as treatment for a particular
health condition.
Chiropractor
visits. Remember that your HSA can be used for
medically necessary expenses. If you go to your
chiropractor due to a particular injury or functional
problem, it is a qualified expense. The chiropractor's
charges would NOT be considered eligible if you are getting
adjustments for general health maintenance.
Mental
Therapy
In
some circles, seeing a therapist is reason for embarrassment,
whereas in other parts of the country people brag about
seeing their therapists. The reality is that mental
therapy should be neither a symbol of shame nor a status
symbol - it is simply another mode of treatment that can
help people live healthier and happier lives.
Psychiatry,
psychology, psychoanalysis, and psychotherapy - all
of these modes of treatment can be paid for from your
HSA. Keep in mind that qualified expenses are those
that pay for treatment or prevention of a medical condition.
If you are seeing a therapist strictly in order to save
your marriage or improve your business skills, these would
not be qualifying expenses.
Alternative
Medicine
More
and more people are disillusioned with the way conventional
medicine is practiced. The focus often seems to
be on treating symptoms rather than reaching the root
cause. Many physicians are very quick to prescribe
the latest drug, when less expensive, safer, and often
more effective natural remedies may work better.
However,
the people who do rely on alternative medical treatments
rarely receive reimbursement from their health insurance
for these expenses. This is one of the reasons that
HSA plans have become so popular among people who do favor
natural and/or alternative medical treatments. Here
is just a very small sampling of the types of treatment
that would be HSA-qualified:
Acupuncture.
Some think the beneficial results of acupuncture are strictly
due to the placebo effect. My veterinarian wife
would tell you differently. Though she mostly practices
conventional veterinary medicine, she does do a good bit
of acupuncture on dogs and cats, and gets some amazing
results.
Homeopathy.
Though controversial, approximately one out of 50 Americans
currently uses homeopathy. Whether using the services
of a professional, or simply buying homeopathic remedies
from the natural food store, remember that these expenses
can be paid for from your HSA.
Traditional
Chinese Medicine. Chinese medicine has been
practiced for thousands of years, and is becoming ever
more popular in the United States. Of course, treatment
modalities that originated in other countries, such as
Ayurveda (from India), would also be considered a qualified
expense.
Faith
healing, shamanism, energy medicine, and other (perhaps)
far out stuff. Yep, almost any type of treatment
could be considered an eligible expense. Keep in
mind that the procedure must be related to the treatment
or prevention of a specific health condition. Services
designed to raise your chi, balance your chakras, or strengthen
your aura might be more than the IRS will allow.
Every
Dollar Counts
Simply
writing this article reminds me of medical expenses we've
incurred where I forgot to save the receipt. That's
like paying an extra 25% each time I do that. Last
week I bought four tubes of lip balm for my son's incredibly
chapped lips. Whole Foods gets over $3 a piece for
those things, and somehow three of them already seem to
have disappeared. Remember that I am not a tax accountant,
and if you have any questions on what you can pay for
from your HSA please consult with a qualified professional.
But for what its worth, next time I buy some chap stick
for him, I will be putting the receipt in my HSA receipts
file.
