HSA eligible expenses includible vs non-includible

You probably already know that can use your health savings account (HSA) to pay for specific expenses. However, there are rules as to what you can and cannot use your HSA to pay for. This distinction is referred to as includible versus non-includible expenses.

  • Includible expenses: The IRS defines qualified medical care expenses as amounts paid for the diagnosis, cure or treatment of a disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate a physical or mental defect or illness. You can use your HSA to pay for any of these types of expenses incurred by you, your spouse or your dependent(s) in the current plan year.
  • Non-includible expenses: Typically, medical expenses for the cost of an item ordinarily used for personal, living or family purposes—unless it is used primarily to prevent or alleviate a physical or mental defect or illness—are typically non-includible. Additionally, qualified medical expenses from previous years or for future years are not includible for the current plan year.

For more information or clarification on operations or other eligible expenses, refer to Publication 502 or consult a tax professional.   source IRS

Did you know physical examinations qualify as an eligible expense for your health savings account (HSA)? That means your annual physical examination and diagnostic tests by a physician are covered. You don’t even need to be ill at the time of the examination!

Are you overpaying out of pocket at the doctor’s office? If you’re not using your health savings account for your visits, you might be.

You especially need to look for lesser-known qualified expenses, like diagnostic devices. These are tools used in diagnosing and treating illness and disease.

  • Example: You have diabetes and use a blood sugar test kit to monitor your blood sugar level. You can include the cost of the blood sugar test kit in your HSA medical expenses.


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