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Thursday, December 07, 2023

What does an HSA cover?

What does an HSA cover?

Boy HSA visiting doctor

Key Takeaways 

HSA funds cover many things, from medical treatments to prescribed medications to dental care. 

A quick guide to the out-of-pocket expenses your health savings account can cover

If you’re worried about healthcare expenses in retirement, you’re not alone. In fact, according to recent data from our 2022 Empowering America’s Financial Journey report, the top three things Americans are worried will impact their finances are:

  • Inflation (92%)
  • A recession (85%)
  • Healthcare costs (83%)1

And while you can’t necessarily control rising inflation or healthcare costs, you can take steps to help minimize the impact to your personal finances.  For starters, if you have a high-deductible health plan, you can use a health savings account (HSA) to set aside money to pay for some medical expenses tax-free.2

How much can you contribute to an HSA?

In 2023, for an individual with self-only coverage under a high deductible health plan, the contribution limit is $3,850. For an individual with family coverage under a high deductible health plan, the contribution limit is $7,750.

 Here are some examples of what can be covered with HSA funds:

Medical treatments

  • Acupuncture
  • Chiropractic care
  • Fertility treatments
  • In-home nursing services
  • Necessary surgery (including necessary reconstructive surgery)
  • Osteopathic care
  • Qualified long-term care services

Medical imaging and tests

  • MRI
  • CT scan
  • X-ray
  • Lab tests

Prescribed medicines

  • Prescription drugs
  • Prescribed over-the-counter drugs
  • Insulin

Medical supplies

  • Bandages
  • Permanent modifications to your home
  • Special equipment installed in your car
  • Crutches
  • Wheelchair
  • Lactation supplies
  • Hearing aids
  • Oxygen
  • Pregnancy test kit
  • Artificial limbs
  • Service animal

Vision care

  • Eye exams
  • Eyeglasses
  • Contact lenses
  • Contact lens solution
  • Eye surgery

Dental care

  • Dental exams
  • Fillings
  • Braces
  • Dentures

Mental health care

  • Psychiatric care
  • Psychoanalysis
  • Psychologist fees

Special education expenses

Tutoring and schooling in:

  • Overcoming learning disabilities
  • Learning Braille
  • Learning lip reading
  • Remedial language training

Addiction treatment

  • Doctor-recommended inpatient treatment for alcoholism and drug addiction
  • Programs to quit smoking

Certain health insurance premiums

  • Long-term care insurance
  • Healthcare continuation coverage
  • Health coverage while on unemployment
  • Medicare A and B if you are age 65 or older


What an HSA doesn’t cover

Keep in mind not every kind of medical expense is reimbursable. Here are some common expenses that an HSA specifically does not cover:

  • Controlled substances, even if legalized in your state
  • Funeral expenses
  • General household help
  • Nutritional supplements
  • Teeth whitening
  • Unnecessary cosmetic surgery

As you can see, HSAs are a great way to pay for your current healthcare costs. But it’s also important to point out there’s no “use it or lose it” provision (like with FSAs), so you can rollover unused funds each year. And you could potentially get more out of your HSA when you use it to save for the future. That’s because HSAs offer a “triple tax advantage”: tax-deductible contributions, tax-free growth and tax-free withdrawals for qualified medical expenses.2


1 Empower, Empowering America’s Financial Journey, November 2022.

2 Contributions, any earnings and withdrawals are federal income tax-free if used to pay for qualified medical expenses. State income taxes may still apply. HSA funds used for nonqualified medical expenses may be subject to applicable federal and state income taxes and/or penalties.


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