Are Orthotics HSA Eligible? How to Get Reimbursed

Health Savings Accounts (HSAs) offer a tax-advantaged way to save for and pay for qualified medical expenses. Available to individuals enrolled in a High-Deductible Health Plan (HDHP), contributions and withdrawals for eligible expenses are tax-free. Many medical expenses can be covered by an HSA, including assistive devices like orthotics. Orthotics are an HSA-eligible expense, providing a valuable benefit for those managing foot and lower limb conditions.

Understanding HSA Eligibility for Medical Expenses

To be considered an HSA-eligible expense, an item or service must meet the Internal Revenue Service (IRS) definition of “medical care.” This definition, found in IRS Publication 502 and Internal Revenue Code Section 213, includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. It also covers treatments affecting any part or function of the body. The expense’s primary purpose must be to alleviate or prevent a physical or mental defect or illness.

Expenses merely beneficial to general health, such as vitamins for general wellness or cosmetic procedures not medically necessary, do not qualify. A wide range of services and supplies are considered eligible when they align with this medical care definition. The expense must be primarily for a medical purpose, not for personal use or general comfort.

Specific Eligibility for Orthotics

Orthotics are eligible for HSA reimbursement when medically necessary and prescribed by a qualified healthcare professional. This includes custom-made orthotics and prefabricated insoles designed to address specific medical conditions. Eligibility requires a diagnosis from a doctor related to a foot or lower limb condition that necessitates orthotics for treatment or prevention.

For instance, orthotics prescribed for conditions like plantar fasciitis, heel pain, arch pain, or issues stemming from diabetes or injuries are eligible. The prescription serves as documentation of the medical need and the healthcare professional’s recommendation for the device. Over-the-counter shoe inserts or arch supports purchased solely for general comfort, athletic performance, or without a specific medical diagnosis do not qualify for HSA reimbursement. A Letter of Medical Necessity (LMN) from a healthcare provider may be required to substantiate the expense. This letter details the medical condition and how the orthotics treat or alleviate it.

Documentation and Reimbursement Process

Maintaining thorough documentation is important when seeking HSA reimbursement for orthotics. Retain records that demonstrate the expense was for a qualified medical purpose. This includes a detailed receipt from the orthotics provider showing the purchase date, item description, and amount paid. If a prescription was required, a copy from your doctor should also be kept.

Many HSA providers offer a debit card for direct payment of eligible expenses, which simplifies the process. If you pay out-of-pocket, you can submit a claim for reimbursement from your HSA. This often involves completing a form provided by your HSA administrator and attaching the necessary documentation. There is no time limit on when you must reimburse yourself for a qualified medical expense, provided your HSA was established when the expense was incurred. It is important to keep all supporting documentation, such as medical diagnoses, prescriptions, and receipts, for at least three to seven years, or as long as your tax return is subject to audit, to substantiate the expense if requested by your HSA administrator or the IRS.