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Health Savings Accounts

What Are Qualified Medical Expenses?

Qualified medical expenses are health-care expenses, as defined by Internal Revenue Code 213(d), that are paid by you, your spouse, or your dependents for the diagnosis, cure, mitigation, treatment, or prevention of disease. These expenses include laboratory fees, prescription drugs, dental treatment, ambulance service, eyeglasses, and hearing aids, as well as many other health care expenses. Note that over-the-counter (OTC) drugs are no not a qualifying expense. HSA funds may also be used to cover health insurance deductibles and co-payments.

Generally, health insurance premiums, including HDHP premiums, are not qualified expenses, except for the following types of health coverage:

  • COBRA health care continuation coverage
  • Qualified long-term care insurance
  • Health care coverage while receiving unemployment compensation
  • Retiree health insurance other than a Medicare supplemental policy (Medigap). This means that if you are age 65 or older, premiums you pay for Medicare Part A, Part B, Part D, or a Medicare HMO, or your share of premiums for employer-sponsored health insurance, including retiree health insurance, can be paid from an HSA.

IMPORTANT NOTE: The HSA trustee or employer is not responsible for ensuring that amounts distributed from an HSA are used for qualified medical expenses.

For a list of qualified medical expenses, see IRS Publication 502.

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