Over half of Health Savings Account (HSA) holders leave thousands of dollars in pre-tax savings on the table every year, because they don’t know exactly what items are HSA eligible. Whether you’re a new HSA owner still learning the ropes or a seasoned user looking to maximize your annual contributions, understanding qualified medical expenses can turn your HSA from a basic savings tool into a powerful way to cover current and future healthcare costs without paying extra taxes.
In this guide, we’ll break down every category of eligible HSA items, from over-the-counter meds to durable medical equipment, plus share tips for avoiding costly mistakes when filing your taxes. We’ll start with the core rule that governs all HSA eligible items, then dive into specific categories to help you navigate your options this year.
The Core Rule for HSA Eligible Items: What Qualifies Under IRS Guidelines?
The simple, official answer to what items are HSA eligible is that they must be used primarily to treat, prevent, or alleviate a physical or mental illness or disability, and they must be for you, your spouse, or your qualifying dependents. The IRS outlines these rules in Publication 502, and any expense that falls outside of these parameters will be considered a non-qualified distribution, which means you’ll owe income taxes plus a 20% penalty on the amount withdrawn. Common exclusions include cosmetic procedures (unless reconstructive), general wellness products, and funeral expenses. It’s important to note that over-the-counter purchases have specific rules too, which we’ll dive into next.
Over-the-Counter Medications: Which OTC Items Count as HSA Eligible?
Before 2020, you needed a prescription to use HSA funds for most over-the-counter medications, but the CARES Act changed that, making most OTC products eligible without a doctor’s note—with one key exception: insulin. Insulin remains eligible for HSA funds no matter what, even without a prescription.
Some of the most commonly used eligible OTC items include:
- Antacids for heartburn and indigestion
- Allergy relief medications like Claritin and Zyrtec
- Pain relievers such as Advil, Tylenol, and aspirin
- Anti-itch creams and topical pain relievers
On the flip side, many common OTC products are not eligible for HSA funds, including:
- Vitamins, supplements, and probiotics (unless prescribed by a doctor to treat a specific medical deficiency)
- Personal care items like toothpaste, shampoo, and deodorant
- General wellness products like CBD oil (unless prescribed for a medical condition in states where it’s legal)
Even with the expanded eligibility, it’s always a good idea to check with your HSA provider first, as some employers impose stricter rules on OTC purchases. Always keep a detailed receipt for every OTC item you buy with HSA funds, including the item name, purchase date, and total cost, to avoid issues during tax season.
Durable Medical Equipment: What Qualifies as HSA Eligible Gear?
Durable medical equipment, or DME, refers to long-term, reusable tools designed to treat a diagnosed medical condition. The IRS defines DME as equipment that can withstand repeated use, is primarily used for medical purposes, and is not useful for someone who doesn’t have a medical condition.
A quick reference table of eligible and ineligible DME items includes:
| Eligible DME | Ineligible DME |
|---|---|
| Wheelchairs, walkers, and crutches | Decorative mobility aids like fancy canes |
| Blood glucose monitors and test strips | Standard exercise equipment like treadmills or yoga mats |
| CPAP machines and sleep apnea supplies | Consumer electronics like smartwatches (unless medically prescribed) |
| Home hospital beds and wheelchair lifts | Beauty or grooming equipment |
You may need a written order from your doctor stating that the DME is medically necessary, even if you don’t need a prescription to purchase it. You can also use HSA funds to rent DME, which is a great option if you only need the equipment for a short period of time.
One important note: if you later sell or stop using the DME for medical purposes, you’ll need to report the fair market value of the equipment as taxable income, unless you donate it to a qualified charity.
Prescription Medications and Professional Care: Full Eligibility Breakdown
Almost all prescription medications, including topical creams, inhalers, and injectable drugs, are 100% eligible for HSA funds, as long as they’re prescribed by a licensed medical provider. This includes both brand-name and generic drugs, as well as prescription-strength OTC products.
Professional medical services that qualify for HSA funds include:
- Doctor’s office copays and visit fees
- Dental cleanings, fillings, and dentures (but not cosmetic dental work like teeth whitening)
- Vision care like glasses, contact lenses, and LASIK surgery (if prescribed to correct vision)
- Telehealth visits for medical care
Many professional services are not eligible for HSA funds, however, including:
- Cosmetic surgery (unless it’s reconstructive after an accident, injury, or birth defect)
- Non-prescription weight loss programs (unless required to treat a specific disease like obesity)
- Funeral or burial expenses
- General wellness checkups that don’t involve treating a diagnosed medical condition
One often-overlooked eligible service is mental health counseling, including therapy for anxiety, depression, and other mental health conditions. As long as the provider is licensed and the treatment is for a diagnosed condition, it’s fully eligible for HSA funds.
First Aid Kits and Home Medical Supplies: What’s HSA Eligible?
Basic first aid supplies are eligible for HSA funds, as long as they’re used to treat medical conditions rather than for general personal grooming or wellness. This includes everything from small bandages to larger medical tools for at-home care.
A numbered list of common eligible home medical supplies includes:
- Sterile bandages, gauze pads, and medical tape
- Antiseptic wipes, hydrogen peroxide, and antibiotic ointment
- Digital thermometers and blood pressure monitors
- Eye wash solutions and saline sprays
- Replacement parts for DME like crutch tips or wheelchair tires
Some items that may seem eligible are actually not, including:
- Decorative bandages with cartoon characters or glitter (unless they’re the only option for treating a wound)
- General first aid kits sold for emergency car use that aren’t used for medical treatment
- Toothbrushes and floss (considered general personal care)
It’s easy to accumulate a lot of first aid and home medical supplies over time, so be sure to keep all receipts organized. The IRS requires you to have proof of purchase for every HSA withdrawal, and keeping digital copies on your phone or computer can make tax season much less stressful.
Alternative and Complementary Therapies: Which Qualify for HSA Funds?
Many people don’t realize that some alternative and complementary therapies are eligible for HSA funds, but only if they meet strict IRS guidelines. The treatment must be prescribed by a doctor to treat a specific medical condition, and it must be a widely accepted and proven medical practice.
Eligible alternative therapies include:
- Acupuncture for chronic pain or other diagnosed conditions
- Chiropractic adjustments (limited to treating spinal conditions)
- Massage therapy (only if prescribed by a doctor for a specific medical issue like back pain)
- Prescription medical cannabis (in states where it’s legal and prescribed for a medical condition)
Most alternative wellness practices are not eligible for HSA funds, including:
- Essential oils for general relaxation or wellness
- Yoga or pilates classes for general fitness
- Homeopathic remedies that aren’t prescribed by a doctor
- Meditation apps for general stress relief
According to a 2023 survey by the Alternative Medicine Review, over 30% of HSA holders have used their funds for alternative therapies, and that number is growing as more people seek holistic healthcare options. Always get a written prescription or doctor’s note stating that the therapy is medically necessary to avoid an IRS penalty for non-qualified distributions.
Long-Term Care and Elderly Supplies: HSA Eligible Items for Aging Loved Ones
HSA funds can be used to cover long-term care expenses for your spouse or qualifying dependents, as long as the care is medically necessary. This includes both in-home care and facility-based care, and the IRS sets annual limits on how much you can use HSA funds for long-term care insurance premiums.
The 2024 IRS annual limits for long-term care insurance premiums are as follows, broken down by age:
| Age Group | 2024 Annual Limit |
|---|---|
| 40 or younger | $5,870 |
| 41–50 | $7,480 |
| 51–60 | $10,040 |
| 61–70 | $11,880 |
| 70 or older | $15,720 |
Other eligible long-term care items and services include:
- Incontinence supplies like pads and diapers
- Home modifications like grab bars and wheelchair ramps
- Home health aides and skilled nursing care
- Adult day care centers that provide medical care
One important thing to remember: you can only use HSA funds for long-term care expenses if the person receiving care is your spouse, dependent, or a former spouse who was covered by your HSA plan at the time the care was provided. You can’t use HSA funds for your own long-term care expenses unless you have a qualifying disability, but the premium limits still apply.
At the end of the day, knowing what items are HSA eligible is one of the easiest ways to maximize your pre-tax healthcare savings. Whether you’re grabbing a bottle of allergy meds at the grocery store, renting a wheelchair for a temporary injury, or paying for long-term care for a loved one, understanding the IRS’s guidelines can help you avoid costly penalties and make the most of your HSA funds. By keeping detailed receipts, checking with your provider before making large purchases, and referencing IRS Publication 502 when you’re unsure, you can use your HSA to cover almost every medical expense that comes your way.
If you’re still confused about a specific expense or want to double-check your eligibility, reach out to your HSA provider or a tax professional for guidance. Take a few minutes this month to organize your HSA receipts from the past year, and consider setting up a dedicated folder to store future purchases. Sharing this guide with friends and family who have HSAs can also help them avoid common mistakes and save money on their healthcare costs this year.