Can I Buy Probiotics With a Health Savings Account?
Unsure if probiotics are HSA-eligible? Understand the IRS requirements, medical necessity, and documentation for qualifying purchases.
A Health Savings Account (HSA) provides a tax-advantaged savings mechanism for qualified medical expenses. Funds contributed to an HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for eligible healthcare costs. A common question concerns the eligibility of items like probiotics for HSA use.
General HSA Eligibility Rules
An expense must meet the Internal Revenue Service (IRS) definition of “medical care” to qualify for HSA reimbursement. This definition includes costs incurred primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease. It also encompasses expenses for the purpose of affecting any structure or function of the body.
Expenses that are merely beneficial for general health, cosmetic purposes, or for activities that do not directly address a diagnosed medical condition are not eligible. For instance, common eligible expenses include doctor visits, prescription medications, and hospital stays. Conversely, items like vitamins taken for general well-being or routine toiletries do not qualify.
Probiotics and HSA Qualification
For probiotics to qualify as an HSA-eligible expense, they must align with the IRS definition of “medical care.” They must be prescribed by a physician or other licensed healthcare provider to treat a specific medical condition or diagnosed illness. Probiotics for general wellness, daily gut health maintenance, or preventive care without a specific diagnosis are not eligible. The IRS has not classified probiotics as universally eligible.
If a direct prescription is not given, a Letter of Medical Necessity (LMN) from a healthcare provider is required to substantiate the expense. This document must detail the specific medical condition being treated and explain how the probiotics are necessary. For example, probiotics might qualify if recommended for conditions like irritable bowel syndrome (IBS) or certain digestive disorders, as part of a treatment plan. However, their purchase for general digestive support without a diagnosed condition is not eligible.
The LMN should include the patient’s details, the healthcare provider’s information, the specific medical condition and diagnosis, and the recommended treatment plan involving the probiotics. It serves as documentation that the probiotic purchase is for a medical purpose, not general health improvement. Without such specific documentation, probiotics do not qualify as a reimbursable expense from an HSA.
Maintaining Records for HSA Purchases
Record-keeping is important for all HSA expenditures, especially for items like probiotics that require specific substantiation. Account holders are responsible for proving that distributions from their HSA were used for qualified medical expenses. The IRS considers any spending from an HSA as equivalent to a tax deduction.
Key records to retain include original receipts, any doctor’s prescriptions, and the Letter of Medical Necessity if applicable. Keep Explanation of Benefits (EOB) statements from your insurance provider, which document expenses and reimbursements. These records substantiate claims during an IRS audit. Failure to provide adequate documentation for non-qualified expenses can result in the distributed amount being subject to income tax, plus a 20% penalty if the account holder is under age 65.