Can I Buy Shampoo With My HSA?
Navigate the rules for using your HSA. Learn what qualifies as a medical expense and how to verify eligibility for various items.
A Health Savings Account (HSA) provides a tax-advantaged way to save and pay for qualified medical expenses. Many individuals wonder about the range of items eligible for purchase with these funds, often extending their curiosity to everyday personal care products. The eligibility of such items, like shampoo, can be less straightforward than traditional medical services.
Understanding HSA-Eligible Expenses
To qualify as an HSA-eligible expense, an item or service must primarily be for “medical care” as defined by the Internal Revenue Service (IRS). This includes expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. The expense must alleviate or prevent a physical or mental defect or illness. This guidance is detailed in IRS Publication 502, “Medical and Dental Expenses.”
Examples of generally eligible expenses include payments for doctor visits, prescription medications, hospital services, and various forms of dental and vision care. These are expenditures directly related to maintaining or restoring health and are widely accepted under HSA rules.
Specifics for Personal Care Items
Regular shampoo, used for general hygiene and cosmetic purposes, is not considered an HSA-eligible expense. Its primary function is to cleanse hair and scalp, which does not directly address a specific medical condition or illness. The IRS distinguishes between items that promote general health or appearance and those that are medically necessary to treat or prevent a disease.
Exceptions exist for certain specialized personal care items, including medicated shampoos. If a shampoo is specifically formulated and used to treat a diagnosed medical condition, such as severe dandruff, dermatitis, lice, or other scalp disorders, it may qualify. For such items to be eligible, a Letter of Medical Necessity (LMN) from a healthcare provider is required, confirming the product is essential for treating a specific medical condition.
Other personal care items follow similar distinctions. For instance, general sunscreens that protect against UV rays are HSA-eligible because they prevent skin cancer. Conversely, regular lotions or moisturizers, unless they contain SPF and are used for sun protection, are not eligible as they serve a general cosmetic or comfort purpose. Specialized skincare products prescribed by a doctor for conditions like eczema or severe acne may also qualify with appropriate documentation.
Verifying Eligibility and Documentation
Determining the eligibility of a specific product before purchase is important. Many products now carry specific labels indicating “HSA/FSA eligible” on their packaging. Reputable online HSA/FSA stores and third-party eligibility checkers provide databases of qualified items. For comprehensive guidance, individuals can consult IRS Publication 502.
Maintaining meticulous records for all HSA purchases is important for tax purposes and potential audits. This includes keeping original receipts that clearly show the item purchased, the date, and the cost. For items not explicitly listed as eligible or requiring a medical necessity, such as medicated shampoos or specialized skincare, a Letter of Medical Necessity or a prescription from a healthcare provider should be kept alongside the receipt.