Can I Use My HSA Card at a Gas Station?

A Health Savings Account (HSA) offers a tax-advantaged way to save and pay for qualified medical expenses. This savings account is paired with a high-deductible health plan (HDHP) and offers several financial benefits, including tax-deductible contributions, tax-free growth, and tax-free withdrawals for eligible healthcare costs. The primary purpose of an HSA is to help individuals manage their out-of-pocket medical expenditures, both current and future.

Gas Station Purchases and HSA Eligibility

General fuel purchases for personal vehicles are not considered qualified medical expenses by the IRS. HSA funds are designated for healthcare-related costs, and routine transportation for daily commuting or personal errands does not fall under this definition. Using an HSA card for such non-medical expenses would be a non-qualified distribution.

An exception to this rule applies to transportation costs directly related to medical care. Funds can be used for fuel, public transportation, or even airfare when traveling to receive medical treatment, pick up prescriptions, or attend diagnostic tests. Examples include mileage driven to and from a doctor’s appointment, hospital parking fees, or tolls incurred on the way to a specialist. Detailed records, such as mileage logs and gas receipts, should be kept to substantiate these expenses if ever requested by the IRS.

Common Eligible HSA Expenses

Beyond transportation costs, a wide range of medical, dental, and vision items qualify as eligible HSA expenses. The Internal Revenue Service (IRS) defines qualified medical expenses as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatments affecting any part or function of the body. This broad definition covers common healthcare needs, including visits to doctors, specialists, and therapists, as well as prescription medications.

Dental care, such as cleanings, fillings, braces, and oral surgery, and vision care, including eye exams, prescription eyeglasses, contact lenses, and LASIK surgery, are eligible. Diagnostic tests, medical equipment like crutches or wheelchairs, and certain therapeutic services also qualify. Over-the-counter medications and menstrual care products are considered eligible expenses, even without a prescription. However, expenses for items that promote general health, such as gym memberships (unless prescribed for a specific condition) or cosmetic procedures, do not qualify.

Managing Your HSA Card and Records

An HSA card functions similarly to a debit card, for direct payment of eligible medical expenses. While convenient, account holders are responsible for ensuring all purchases made with the card are for qualified medical expenses as defined by the IRS. This responsibility extends to maintaining proper documentation for every transaction.

Keep thorough records, including receipts, medical statements, and Explanation of Benefits (EOB) forms, for HSA expenditures. These records demonstrate that distributions were used exclusively for qualified medical expenses, were not previously reimbursed, and were not claimed as an itemized deduction on a tax return. Without adequate documentation, especially during an IRS audit, any unsubstantiated distribution may be subject to income tax and an additional 20% penalty if the account holder is under age 65. Records should be retained for at least seven years, aligning with general tax record-keeping guidelines.