Can I Buy Shoes With HSA? When They Are Eligible

A Health Savings Account (HSA) is a tax-advantaged savings account for qualified medical expenses. These accounts offer a triple tax advantage, allowing tax-deductible contributions, tax-free growth, and tax-free withdrawals for eligible costs. While HSAs cover common medical expenses like doctor visits and prescription medications, questions arise regarding less obvious items, such as shoes.

Understanding Qualified Medical Expenses

The Internal Revenue Service (IRS) defines a “qualified medical expense” as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any structure or function of the body. This definition encompasses a wide array of services and products.

Common examples of qualified medical expenses include visits to a physician, prescription drugs, dental care, and vision care, such as eyeglasses or contact lenses. For an expense to qualify, it must primarily alleviate or prevent a physical or mental disability or illness. Expenses solely beneficial to general health do not qualify.

Shoes and HSA Eligibility

Ordinary shoes purchased for everyday wear, general comfort, or athletic activities are generally not considered qualified medical expenses. HSA funds cannot be used for items merely beneficial to general health or for personal use. This distinction is crucial when considering footwear.

However, specific types of shoes can be HSA-eligible if they are medically necessary and prescribed by a qualified healthcare professional. This eligibility typically applies to footwear designed to treat or mitigate a diagnosed medical condition. Examples include custom-made orthopedic shoes, therapeutic footwear for individuals with diabetes, or specialized shoes required for severe foot deformities or other orthopedic issues. These shoes must be specifically intended for the treatment or mitigation of the diagnosed condition, rather than for general health or comfort. In some cases, only the cost difference between a specialized shoe and a non-specialized, ordinary shoe may be eligible for reimbursement.

Documentation for Medically Necessary Shoes

Proper documentation is essential to substantiate the medical necessity of shoes for HSA eligibility, especially if the IRS requests verification. This typically involves obtaining a Letter of Medical Necessity (LMN) or a prescription from a licensed healthcare provider, such as a doctor or podiatrist. The LMN should clearly state the patient’s specific medical condition and explain why the shoes are necessary for treatment or mitigation.

The letter should detail how the shoes relate to the diagnosis and why they are not merely for general health purposes. It should include the diagnosis, clinical justification, and how the item will treat, mitigate, or prevent the medical condition. Maintaining detailed records, including the LMN or prescription and the itemized receipt, is important for tax purposes.

Using Your HSA for Purchases

Once eligibility and documentation are secured, there are two primary methods for using HSA funds. Many HSA providers issue a debit card linked directly to the account, which can be used at the point of sale for qualified medical expenses. This offers a convenient way to pay directly for eligible items.

Alternatively, individuals can pay for the eligible expense out-of-pocket using personal funds and then seek reimbursement from their HSA administrator. This reimbursement process involves logging into the HSA provider’s online portal and requesting a transfer of funds to a linked personal bank account. There is no time limit for reimbursement, provided the expense was incurred after your HSA was established. Always retain all receipts and supporting documentation, as they may be required for tax purposes.