Qualified Medical Expenses

Qualified medical expenses are defined by IRS Code, Section 213(d) and include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease for the purpose of affecting any structure or function of the body.

Qualified Medical Expenses**

 

  • Acupuncture
  • Alcoholism treatment
  • Ambulance service
  • Annual physical examination
  • Artificial Limb
  • Artificial Teeth
  • Body Scan
  • Braille books and magazines (partial cost)
  • Breast Reconstruction Surgery following a mastectomy
  • Capital expenses for special equipment installed in home for main purpose of medical care (ex: support bars, exit ramps, lowering of cabinets)
  • Car special equipment for disabilities
  • Chiropractor
  • Christian Science Practitioner
  • COBRA premiums
  • Contact lenses and supplies
  • Dental treatments (ex. Cleanings, fluoride treatments, x-rays, fillings, extractions)
  • Dentures
  • Diagnostic devices (ex. Blood sugar test kit)
  • Drug Addiction treatment
  • Doctor’s visits
  • Eye Exam
  • Eyeglasses
  • Eye surgery (including laser vision correction surgery)
  • Fertility procedures
  • Guide dog or other service animal
  • Health plan premiums during a period in which you are receiving government unemployment compensation
  • Hospital Services
  • Laboratory Fees
  • Long Term Care insurance premiums
  • Medicare Part A, B, C, or D
  • Nursing home (non-custodial)
  • Nursing services
  • Operations
  • Optometrist
  • Orthodontia (braces)
  • Over-the-Counter Medicines and Supplies with prescription (see below for details)
  • Oxygen and equipment
  • Pre-natal vitamins
  • Prescription medication
  • Psychiatric care
  • Psychologist Special home for intellectually and developmentally disabled
  • Special Education
  • Stop-Smoking programs
  • Telephone and Television for hearing impaired
  • Therapy
  • Transplant (ex: heart, kidney)
  • Transportation for medical care
  • Vasectomy and sterilization
  • X-ray

 

Over the Counter(OTC) Medicines and Supply Expenses

With the passage of the Patient Protection and Affordable Care Act on March 23, 2010 there are important changes to qualified OTC expenses. Most OTC medicines will now require a prescription in order to be eligible for payment through your HSA. Some OTC items that still qualify WITHOUT a prescription are listed below:

 

  • Bandages
  • Crutches
  • Hearing Aids and batteries
  • Insulin and supplies
  • Pregnancy Test Kit
  • Wheelchair

 

Non-Qualified Expenses**

Expenses for items that are merely beneficial to the general health of an individual are not considered qualified expenses. If you use your HSA to pay for expenses that are not qualified you will have to pay income tax and a 20 percent penalty on the non-qualified purchase amount. Below are some examples of non-qualified expenses:

 

  • Childcare for normal, healthy baby
  • Controlled substances that violate federal law
  • Cosmetic dentistry
  • Cosmetic surgery
  • Dancing lessons
  • Electrolysis
  • Funeral expenses
  • Hair transplant
  • Health club dues
  • Household help
  • Late Charges
  • Maternity clothes
  • Nutritional supplements and vitamins
  • OTC medications (without a prescription)
  • Swimming lessons
  • Teeth Whitening
  • Vacation
  • Veterinary Fees

 

Documentation of Qualified Medical Expenses

The IRS requires that you keep itemized receipts to document your qualified withdrawals. Those receipts must include the date of service and the type of expense. Bankcard statements and estimates of expenses are not permitted.

Whose expenses are qualified?

Your qualified tax-free HSA* withdrawals may be for expenses incurred by you, your spouse or your eligible dependents (Section 152 of the federal tax code), regardless of whether or not they are covered under your health plan.

When are expenses qualified?

Your expenses are qualified when they are incurred after your HSA is established. Then, even if you lose eligibility to make contributions to your HSA, you may still spend the money you have accrued in your HSA to pay for qualified medical expenses, tax-free.*

Questions?

Contact your helpful UMB Healthcare Services customer support agent at 866.520.4HSA (4472).

*All mention of taxes is made in reference to federal tax law. State taxes may vary, consult your tax adviser for details.

**For additional details on what qualifies or doesn’t qualify as a medical expense see IRS tax publication 502: Medical and Dental Expenses on the web at irs.gov/publications.

Introducing UMB HSA Saver an easier way to invest in your HSA

Now you can invest your HSA savings in UMB HSA Saver and take advantage of our easy-to-use investing platform.

HSAs build long-term wealth

HSAs are available to help pay for current qualified medical expenses as well as to save for future expenses, all in a tax-exempt account.

Watch how to use your HSA

Make the most of your HSA by watching this informational video.

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Funds in an HSA Deposit Account are held at UMB Bank, n.a., Member FDIC. High-Deductible Health Plans constitute insurance products, which are not offered by UMB Bank, n.a. and are not FDIC-insured.
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