Can I Use My HSA for Allergy Medicine?

Health Savings Accounts (HSAs) offer a tax-advantaged way to save and pay for healthcare expenses. Understanding the specific guidelines for eligible medical expenses, such as allergy medicine, is important for effectively utilizing these accounts.

Understanding Health Savings Accounts

A Health Savings Account (HSA) is a specialized savings account designed to help individuals save for qualified medical expenses. To be eligible for an HSA, an individual must be enrolled in a High-Deductible Health Plan (HDHP) and generally cannot have other health coverage or be claimed as a dependent. These accounts offer a triple tax advantage: contributions are tax-deductible, the funds grow tax-free, and withdrawals for eligible medical expenses are also tax-free. Funds within an HSA remain with the individual, even if they change employers or leave the workforce.

General Rules for Eligible Medical Expenses

The Internal Revenue Service (IRS) defines eligible medical expenses as costs paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, as well as for treatments affecting any structure or function of the body. This broad definition covers a range of healthcare costs, including doctor visits, hospital stays, and prescription medications. Expenses must primarily be for medical care and not for general health or cosmetic purposes.

Allergy Medicine Eligibility Specifics

Both prescription and over-the-counter (OTC) allergy medicines are generally eligible for HSA reimbursement. Prior to 2020, OTC medications typically required a doctor’s prescription to be HSA-eligible; however, the CARES Act removed this requirement, allowing most OTC allergy medicines to be purchased with HSA funds without a prescription.

Common examples of eligible OTC allergy medications include antihistamines like Claritin, Zyrtec, Allegra, and Benadryl. Nasal sprays such as Flonase and Nasacort, along with decongestants, also qualify. However, items not directly for medical treatment, such as air purifiers, HEPA filters, or general dietary supplements, are typically not eligible unless prescribed for a specific medical condition with a Letter of Medical Necessity.

Using Your HSA Funds for Allergy Medicine

Once eligibility is confirmed, there are several ways to use HSA funds for allergy medicine purchases. Many HSA providers issue a debit card, which can be used directly at the point of sale. Alternatively, individuals can pay for eligible expenses out-of-pocket and then reimburse themselves from their HSA at a later time. Some HSA administrators also offer options for direct payment to providers.

Maintaining thorough records is important for all HSA-funded expenses, including allergy medicine. It is advisable to keep receipts that clearly show the date of purchase, the amount spent, and a description of the item. These records are necessary for tax purposes and can be requested in the event of an IRS audit. Electronic records are accepted, and organized records ensure proof of eligibility is readily available for tax purposes.