What expenses are considered "qualified medical expenses"?
The term “qualified medical expenses” means amounts paid for the medical care, as defined in Section 213(d) of the Internal Revenue Code, for the accountholder, their spouse or their tax dependents, but only to the extent such amounts are not compensated by insurance or otherwise. This includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure or function of the body, as well as for transportation primarily for, and essential to, such care. Some examples include:
- A medical plan deductible
- Dental treatments, exams or cleaning costs
- Prescription drug costs
- Vision expenses, such as contact lenses or glasses
- Chiropractic or acupuncture fees
- Eye surgery
- Over the counter medicines
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Qualified medical expenses do not include insurance premiums other than premiums for certain long-term care insurance, premiums on a health plan during any period of continuation coverage required by federal law (e.g., COBRA coverage), or premiums for health care coverage while an individual receives unemployment compensation. A full list of qualified expenses are available on IRS Publication 502.‡ Distributions used for any other purpose are includible in income and may also be subject to an additional 20 percent tax.
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