Can I Use HSA for Sunglasses? When It’s Allowed

A Health Savings Account (HSA) provides a tax-advantaged savings mechanism for individuals enrolled in a high-deductible health plan (HDHP). Funds contributed to an HSA are typically tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. This account offers financial flexibility for a wide range of eligible health-related expenditures.

HSA Eligibility Criteria for Medical Expenses

A “qualified medical expense” is a cost primarily incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. Internal Revenue Code Section 213(d) defines these eligible expenses.

Common examples of qualified medical expenses include payments for doctor visits, prescription medications, dental care, and various vision services. This covers items such as eye exams, corrective eyeglasses, and contact lenses. Costs solely for general well-being, like vitamins or elective cosmetic procedures, are not considered qualified medical expenses.

Sunglasses as a Qualified Medical Expense

The eligibility of sunglasses for HSA reimbursement depends on whether they serve a medical purpose rather than providing general sun protection or being a fashion accessory. Prescription sunglasses are generally considered qualified medical expenses. This is because they provide vision correction, similar to regular eyeglasses, and also offer protection from harmful ultraviolet (UV) rays.

Non-prescription sunglasses are typically not eligible for HSA funds unless medically necessary. This medical necessity arises when a healthcare professional prescribes them to treat or prevent a particular medical condition. Examples include severe light sensitivity (photophobia) due to conditions like cataracts, glaucoma, or post-surgical recovery, where enhanced UV protection is clinically required.

For non-prescription sunglasses to qualify, individuals often need a Letter of Medical Necessity (LOMN) from their doctor. This document should explain the specific medical condition, why the sunglasses are necessary for treatment or prevention, and the duration for which they are needed.

Using Your HSA for Approved Expenses

Once an expense is determined to be qualified, there are several methods for utilizing HSA funds. Many HSA providers issue a debit card, which can be used directly at the point of sale for eligible purchases. Alternatively, individuals can pay for qualified expenses out-of-pocket and then submit a claim to their HSA administrator for reimbursement. This reimbursement can occur at any time, even years after the expense was incurred, provided the HSA was established before the expense.

Maintaining detailed records is important for HSA users. Keep all receipts, Explanation of Benefits (EOB) statements, and any Letters of Medical Necessity. These documents prove distributions were for qualified medical expenses and are important for tax purposes, especially during an IRS audit.

Using HSA funds for non-qualified expenses can lead to significant financial penalties. If funds are withdrawn for non-medical purposes before age 65, the amount becomes subject to ordinary income tax and an additional 20% penalty.