Can I Buy Pregnancy Tests With an HSA?

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals save for and pay for qualified medical expenses. These accounts are available to those enrolled in a high-deductible health plan (HDHP) and offer a way to manage healthcare costs with tax benefits. Many individuals wonder about the eligibility of various everyday health items, including pregnancy tests, for HSA use.

Eligibility of Pregnancy Tests for HSA

Over-the-counter pregnancy tests are considered qualified medical expenses and are eligible for reimbursement or direct payment through an HSA. The Internal Revenue Service (IRS) defines qualified medical expenses as costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. Pregnancy tests fall under this definition as diagnostic tools.

These tests are specifically included under IRS Code Section 213 and often listed in IRS Publication 502, which details eligible medical and dental expenses. The CARES Act of 2020 further expanded eligible items to include over-the-counter medications and menstrual care products without a prescription, solidifying the eligibility of such diagnostic tools.

Pregnancy tests serve a diagnostic purpose by detecting specific hormones. This diagnostic function makes them eligible for HSA funds. Other related items, such as ovulation tests, may also be eligible.

Methods for Using Your HSA

Using your HSA to purchase pregnancy tests offers several convenient options. One common method involves using a dedicated HSA debit card, which functions similarly to a regular debit card. This card can be swiped at the point of sale in pharmacies, supermarkets, or used for online purchases where medical merchants are accepted.

Another approach is to pay for the pregnancy test out-of-pocket first and then reimburse yourself from your HSA. This method allows you to preserve your HSA funds, potentially enabling them to grow tax-free over time. To do this, you typically submit a claim to your HSA administrator, often through an online portal or mobile app, providing details of the expense and linking your bank account for a direct deposit reimbursement.

Many HSA providers also facilitate online transfers, allowing you to move funds from your HSA to a linked personal checking or savings account. Some providers may even offer the option to order checks directly from your HSA. Regardless of the payment method, it is important to ensure that the expense was incurred after your HSA account was established.

Documentation and Record Keeping

Maintaining accurate records for all HSA purchases is important for tax purposes and in case of an IRS audit. While HSA administrators may not track individual purchases, account holders are responsible for substantiating that distributions were exclusively for qualified medical expenses. This includes retaining itemized receipts that clearly show the date of purchase, a description of the item, and its cost.

Keep these records for at least three years after filing the relevant tax return. Digital storage of receipts, perhaps through an HSA provider’s online portal or a personal scanning system, can be a practical way to manage documentation.

Should you fail to prove that an HSA distribution was for a qualified medical expense, the amount may be subject to income tax and a 20% penalty, especially if you are under 65. Therefore, diligent record-keeping, including keeping receipts and HSA statements, helps ensure compliance and avoids potential tax issues.