Health Savings Account funds can be used to pay for a wide range of medical, dental, vision, and mental health expenses tax-free. But the rules on what qualifies and what does not are not always intuitive. Sunscreen is eligible, but teeth whitening is not. Acupuncture qualifies, but a gym membership does not (usually). This guide organises every major HSA eligible expense by category and flags the common items people assume qualify but actually do not.
These rules come from IRS Publication 502 (Medical and Dental Expenses) and IRS Publication 969 (Health Savings Accounts). The CARES Act of 2020 permanently expanded eligibility to include over-the-counter medications and menstrual care products without a prescription.
Health insurance premiums are generally NOT an HSA eligible expense. However, there are important exceptions. You CAN use HSA funds tax-free to pay for:
After age 65, using your HSA to pay Medicare premiums is one of the most tax-efficient strategies available. Medicare Part B premiums in 2026 are approximately $185/month ($2,220/year). Paying this from a tax-free HSA instead of after-tax savings provides significant annual tax savings, especially for retirees in higher brackets.
There is no time limit on HSA reimbursement. You can pay a medical bill out of pocket today, save the receipt, and reimburse yourself from your HSA 5, 10, or 30 years from now, completely tax-free. This means you should keep every medical receipt, even if you pay from your regular bank account. Here is how to implement this strategy:
Set up a dedicated folder in Google Drive, Dropbox, or your preferred cloud storage. Photograph or scan every medical receipt, EOB (Explanation of Benefits), and bill immediately after receiving it.
Maintain a simple spreadsheet with the date, provider, amount, and what the expense was for. Include the file name of the receipt image. This makes reimbursement easy years later.
Use your checking account or credit card for medical expenses instead of your HSA debit card. Your HSA balance stays invested and compounds tax-free.
At any point in the future, submit your accumulated receipts to your HSA provider for tax-free reimbursement. Many people do this in retirement for a large tax-free withdrawal.
If you withdraw HSA funds for non-qualified expenses before age 65, you face a 20% penalty on top of regular income tax. For someone in the 22% bracket, this means a total effective tax rate of 42% on the withdrawal. This is why it is critical to keep HSA spending limited to qualified medical expenses (or to wait until 65 for non-medical withdrawals).
After age 65, the 20% penalty is waived. Non-medical withdrawals are simply taxed as ordinary income, exactly like a Traditional IRA or 401(k) withdrawal. Medical withdrawals remain 100% tax-free at any age. This dual-use flexibility after 65 is what makes the HSA the most versatile retirement account available.
Yes. HSA funds can be used for dental exams, cleanings, fillings, crowns, root canals, braces, dental implants, dentures, and dental X-rays. Cosmetic dental procedures like teeth whitening are not eligible.
Yes. HSA eligible vision expenses include eye exams, prescription glasses, prescription sunglasses, contact lenses, contact lens solution, LASIK surgery, and other corrective eye surgery. Non-prescription sunglasses are not eligible.
If you are under 65, non-qualified HSA withdrawals are subject to a 20% penalty PLUS regular income tax. After age 65, the penalty is waived but you still pay income tax (making it equivalent to a Traditional IRA withdrawal). For medical expenses, there is never a penalty or tax at any age.
No. The IRS has no deadline for HSA reimbursement. You can pay a medical bill today, save the receipt, and reimburse yourself from your HSA 10, 20, or even 30 years later, completely tax-free. The only requirement is that you were HSA-eligible when the expense occurred and that it was not reimbursed from another source.
Generally, no. Gym memberships, fitness equipment, and general exercise programs are not HSA eligible expenses. However, if a doctor provides a letter of medical necessity for exercise to treat a specific condition (such as obesity, heart disease, or physical rehabilitation), those costs may become eligible.