Because health accounts were created by the tax code, it's the Internal Revenue Service that determines what expenses can be reimbursed and what cannot. Here are some examples of eligible and ineligible medical expenses.
Examples of eligible expenses
- Acupuncture
- Alcohol and drug addiction treatment
- Breast reconstruction surgery
- Dental treatment
- Diagnostic tests and devices
- Doctor's visits
- Drugs and prescriptions
- Eyeglasses, contact lenses and exams
|
- Fertility enhancements
- Hearing aids and batteries
- Operations/surgery (non-cosmetic)
- Nursing services
- Physical therapy
- Psychiatric care
- Smoking cessation
|
> View IRS Publication 502 for a full list
Examples of ineligible expenses
- Cosmetic surgery
- Diaper service
- Electrolysis or hair removal
- Funeral expenses
- Health club dues
- Illegal operations and treatments
- Maternity clothes
- Nutritional supplements
|
- Over-the-counter drugs and medicines not use for a medical purpose
- Toiletries (e.g. toothbrush, toothpaste)
- Teeth whitening
- Weight loss programs (unless prescribed to treat a specific disease)
|
Differences among accounts
Eligible medical expenses are similar for all health accounts, but there are some differences:
| HSA |
FSA |
HRA |
| Any otherwise unreimbursed expenses as defined under 213(d) of the Internal Revenue Code, except amounts distributed to pay health insurance premiums*, are eligible.
People older than age 65 can use HSA funds to pay for non-eligible expenses, but they must report the disbursements as taxable income.
* Premiums can be reimbursed for:
- Health insurance for people age 65 and older (except Medicare supplement policies).
- COBRA premiums.
- Long-term care premiums.
- Health insurance premiums for people receiving unemployment compensation.
|
Any otherwise unreimbursed expenses as defined under 213(d) of the Internal Revenue Code, except health insurance premiums and long-term care services, are eligible.
Note: Savings accounts can also be established for dependent care and commuter expenses. |
Employers configure the account to reimburse all* or some of any otherwise unreimbursed expenses as defined under 213(d) of the Internal Revenue Code.
* Long-term care services and premiums for coverage under employer pretax plans are not reimbursable. |
HSAs are offered by OptumHealth Bank, Member FDIC, and are subject to eligibilty.
A special online store at drugstore.com identifies health care items eligible for reimbursement through HSAs and FSAs. Check your employer's guidelines for eligible expenses if you have an HRA. 