Can I Use My HSA for Contact Lenses?

A Health Savings Account (HSA) offers a tax-advantaged way to save for qualified medical expenses. These accounts help individuals covered by high-deductible health plans manage healthcare costs. An HSA allows you to contribute pre-tax money, which can grow tax-free and be withdrawn tax-free for eligible expenses.

Understanding Qualified Medical Expenses

The Internal Revenue Service (IRS) defines qualified medical expenses as costs incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any structure or function of the body. These expenses must primarily serve to alleviate a physical or mental defect or illness. Common examples include doctor visits, prescription medications, and dental care. Expenses not meeting this criterion, such as cosmetic procedures or general health improvements not prescribed by a physician, are not covered.

Contact Lenses and Related Items as Qualified Expenses

Contact lenses are considered a qualified medical expense by the IRS because they correct impaired vision, which is a medical condition. This means you can use your HSA funds to purchase prescription contact lenses. The eligibility extends beyond the lenses themselves to include items necessary for their proper care and maintenance.

Related items such as contact lens solutions, including multipurpose solutions, hydrogen peroxide-based cleaning systems, and saline solutions, are also eligible. Additionally, professional eye exams required for obtaining a contact lens prescription or assessing eye health are qualified expenses. However, contact lenses purchased solely for cosmetic purposes, without a medical necessity for vision correction, are not eligible.

How to Use Your HSA Funds

Using your HSA funds for qualified medical expenses offers flexibility. One common method involves using an HSA debit card, which functions similarly to a regular debit card. You can swipe this card at the point of sale, such as at an optometrist’s office, pharmacy, or eligible online retailer, to directly pay for your contact lenses and related supplies.

Alternatively, you can pay for qualified expenses out-of-pocket using personal funds and then reimburse yourself from your HSA. This process involves logging into your HSA account online or through a mobile app, submitting a reimbursement request, and providing documentation of the expense. Reimbursement can be done by transferring funds to a linked bank account, receiving a check, or even withdrawing cash from an ATM. There is no time limit for requesting reimbursement, as long as the expense was incurred after your HSA was established and has not been reimbursed from another source.

Important Record Keeping

Maintaining thorough records for all HSA transactions is important for tax purposes and in case of an IRS audit. The IRS requires you to keep documentation demonstrating that distributions were used exclusively for qualified medical expenses. These records also need to show that the expenses were not previously paid or reimbursed from another source, nor taken as an itemized deduction on your tax return.

You should retain receipts, invoices, and any Explanation of Benefits (EOB) statements from your health insurance provider. These documents should clearly detail the date of service, the provider’s name, the specific service or item purchased, and its cost. While you do not typically send these records with your tax return, keeping them accessible is important for verifying the legitimacy of your HSA distributions if requested by the IRS.