Are Probiotics an HSA-Eligible Expense?
Navigate HSA eligibility for probiotics. Understand IRS guidelines, the role of medical necessity, and required documentation to determine if your supplement qualifies.
A Health Savings Account (HSA) is a tax-advantaged savings account for individuals with high-deductible health plans to pay for qualified medical expenses. It offers a triple tax advantage: contributions are tax-deductible, earnings grow tax-free, and withdrawals for eligible medical costs are also tax-free. HSAs provide a dedicated fund for a wide range of medical, dental, and vision services and products.
Understanding HSA-Eligible Expenses
The Internal Revenue Service (IRS) defines what qualifies as a medical expense for HSA purposes. An expense must be primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any body structure or function. Expenses merely beneficial to general health, such as vitamins or general wellness supplements, do not qualify. An HSA-eligible item or service must address a specific physical or mental defect or illness.
Common eligible expenses include doctor visits, prescription medications, dental care, and vision care. Over-the-counter (OTC) medicines and drugs became eligible without a prescription as of January 1, 2020. This rule change primarily applies to items classified as medicines or drugs. Dietary supplements, distinct from OTC medicines, require a specific medical necessity to be considered eligible.
Probiotics and HSA Eligibility
Probiotics are categorized as dietary supplements, meaning they are not HSA-eligible if purchased for overall wellness or preventative purposes. IRS guidelines differentiate between items for general health and those used to treat a diagnosed medical condition. Using HSA funds for probiotics simply to support general gut health without a specific medical directive is not permitted.
For probiotics to be HSA-eligible, they must be prescribed or recommended by a licensed medical professional to treat a specific medical condition. Examples include irritable bowel syndrome (IBS) or digestive issues from antibiotic use. A simple suggestion from a healthcare provider is insufficient; a formal prescription or a Letter of Medical Necessity (LMN) is required. This documentation must clearly link the probiotic to the treatment of a diagnosed illness, outlining how it will alleviate the issue and treatment duration.
Documentation and Record-Keeping
Maintaining meticulous records is important for any HSA account holder, especially when claiming expenses like probiotics that require specific justification. If a probiotic purchase is made using HSA funds, retain the formal prescription or Letter of Medical Necessity (LMN) from the licensed medical professional. This document serves as primary evidence that the expense was for a specific medical condition, not general health.
Always keep original receipts for all probiotic purchases, in addition to medical documentation. These receipts, along with the prescription or LMN, are necessary for substantiating the expense. In an IRS audit, these records demonstrate that funds were used for qualified medical expenses according to IRS regulations. Proper record-keeping ensures compliance and prevents potential penalties for non-eligible withdrawals.