When it comes to Health Savings Account health plans, one of most common questions we hear is what is a qualified medical expense? As you know, you can use your savings account to cover expenses that are not covered by your health plan, though there are limitations as to what does and does not fall under the definition of eligible medical expense. According to the IRS Publication 502, Medical and Dental Expenses, the general purpose of the health savings account is to cover “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” Such items that would fall under this category include:

•• Fees paid to medical practitioners
•• Costs of hospitalization or inpatient treatment
•• Dental Expenses
•• Surgery
•• Medical examinations
•• Medications
•• Medical aids
•• Transportation
•• Adding handrails or grab bars anywhere (whether or not in bathrooms)
•• Modifying hardware on doors.
•• Constructing entrance and exit ramps or modifying the areas in front of entrance and exit doorways 

Since the definition of what could fall under each category is open to interpretation means that additional clarification is needed in Publication 502. Therefore, the text continues to state “”Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health…”. This means though a much needed vacation can do a world of good, it is not yet a qualified medical expense. Vitamins are also not considered deductible unless they are recommended by a medical practitioner for a specific medical condition diagnosed by a physician.

However, there are many beneficial deductions that will be considered a qualifying medical expense, such as smoking cessation programs (though nicotine gum and/or patches are not) as well as weight loss programs, as long as they are part of a treatment plan prescribed by a physician for a specific disease. You can even deduct health club fees as long as they are part of a physician’s recommended treatment plan.

Please let us know if you have any questions about HSA plans, or click on the link below to read more.