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.
