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Do You Know About These HSA Qualified Expenses?

A Health Savings Account (HSA) is an ideal way for some physicians to save for medical expenses while also reducing taxable income. In addition to a variety of benefits, many items qualify as an HSA expense. So let’s dig a little deeper into exactly what may be considered as an HSA qualified expense.

HSA Qualified Expenses

With an HSA, contributions are either tax-deductible or pre-tax (if made by payroll deduction).  Either way, income taxes are reduced. The government allows the tax advantages with an HSA for qualified medical expenses, such as the ones below:

  • Medical and Dental Expenses

  • Prescription Drugs

  • Doctor’s fees

  • Chiropractors

  • Hospital services such as meals and lodging

  • Vision Expenses

  • Hearing Aids

  • Imaging Services, such as an MRI

  • Psychiatric & Psychologist Visits

  • Smoking Successions

  • Vasectomy

  • Pregnancy Tests

  • Drug Addiction Therapy

  • Guide Dogs

  • Long-term Care Premiums and Expenses

  • COBRA Coverage Premiums

  • Medicare, Medicare Supplement and Medicare Prescription Premiums

The above expenses can be incurred by you and your spouse, as well as certain dependants, and you can include the medical and dental expenses you paid this year, regardless of when the services were provided. Even though you don’t need to submit receipts, it’s a good idea to keep your receipts and bills for possible future auditing.

Regarding expenses not HSA eligible, rules have become more strict throughout the years. Generalized purchases that may contribute to your overall health, such as supplements, exercise classes or training, over-the-counter medicine, non-prescribed weight loss programs and elective cosmetic procedures are not eligible. If you do decide to use your HSA for items such as these, you will pay income tax and be assessed a hefty 20% penalty. For all eligible and ineligible expenses, the IRS provides a complete list here.

Ways an HSA can benefit physicians

HSAs offer great benefits to physicians that are account holders. The heavy tax-advantage and the savings are two of the biggest benefits that physicians have today with an HSA. With an HSA, you have the option to invest your HSA in mutual funds or other types of investment tools, and an HSA can be used as a great monetary resource for retirement. For example, if you have not used your HSA funds for medical expenses, you can begin withdrawing your money at the age of 65 without penalties. And, the best part is you can use the money for any type of expense once you reach that age.

If you have yet to enroll in an HSA, or would like more information on HSA qualifying medical expenses, contact us today.

Speak with a TMA Insurance Trust Advisor:

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