Are Pregnancy Pillows HSA Eligible?

Health Savings Accounts: An Overview

A Health Savings Account (HSA) is a tax-advantaged savings and investment account designed for healthcare expenses. Individuals with a high-deductible health plan (HDHP) can contribute pre-tax dollars to an HSA. Funds grow tax-free and can be withdrawn tax-free for qualified medical expenses.

Qualifying Medical Expenses for HSAs

The Internal Revenue Service (IRS) defines a “qualified medical expense” as amounts paid primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. These expenses must be incurred to alleviate or prevent a physical or mental defect or illness.

Examples of generally accepted HSA-eligible expenses include doctor visits, hospital services, prescription medications, dental care, and vision care. Mental health services, chiropractic treatments, and necessary medical equipment also qualify. Certain over-the-counter medications and menstrual products became eligible without a prescription after the CARES Act. The IRS provides guidance on these expenses in Publication 502.

Assessing Pregnancy Pillow Eligibility

Pregnancy pillows are not considered qualified medical expenses if their purpose is for general comfort or convenience during pregnancy. HSA eligibility hinges on the expense being primarily for a medical purpose, not general well-being. Therefore, a pregnancy pillow purchased solely for better sleep or comfort without a specific medical condition would not qualify.

However, a pregnancy pillow could be eligible if a healthcare professional recommends it to treat a specific medical condition related to pregnancy. For instance, if a pregnant individual experiences severe back pain, sciatica, pelvic girdle pain, or sleep apnea, and a doctor prescribes a pregnancy pillow for lumbar support or to alleviate these ailments, it may qualify. The distinction lies in whether the pillow addresses a diagnosed medical issue rather than general discomfort.

Obtaining a Letter of Medical Necessity

For items not automatically considered qualified medical expenses, such as a pregnancy pillow used for specific medical conditions, a Letter of Medical Necessity (LMN) can establish eligibility. An LMN is a formal document from a licensed healthcare provider, like a physician, chiropractor, or physical therapist, that justifies the medical need for a particular product or service. This letter serves to convert an otherwise non-eligible expense into a qualified one for HSA purposes.

The LMN should clearly state the specific medical condition being treated, including relevant diagnostic codes if applicable. It must explain how the pregnancy pillow, or any other item, will alleviate or treat the condition. The letter should also specify the recommended duration of use and include the healthcare provider’s name, credentials, and signature.

Maintaining HSA Records

Maintaining thorough records for all HSA-funded expenses is important for account holders. This practice is important for tax purposes and in preparation for a potential IRS audit. Individuals are responsible for proving that HSA distributions were used for qualified medical expenses.

Key documents to retain include receipts, detailed invoices, and Explanation of Benefits (EOB) statements from insurance providers. If an LMN was required, it should be kept alongside these records. These documents prove expenses were qualified, not reimbursed, and not claimed as an itemized deduction. Records should be kept for at least three years, or longer if the HSA account remains open. Failure to substantiate qualified expenses can result in the distribution being subject to income tax and a 20% penalty if the account holder is under age 65.