Can I Use My HSA for Dental Expenses?

A Health Savings Account (HSA) is a tax-advantaged savings mechanism for qualified medical expenses. Funds are set aside pre-tax, allowing individuals to pay for eligible healthcare costs with tax-free dollars. HSAs provide a financial resource for health-related expenditures, including dental care, vision care, and prescriptions, helping manage out-of-pocket healthcare costs.

Eligible Dental Expenses

Many dental expenses qualify for payment through an HSA under IRS guidelines. This includes services for the prevention, diagnosis, cure, mitigation, or treatment of dental disease. Routine preventative care, such as dental exams, professional cleanings, and X-rays, are generally eligible.

Restorative procedures are also covered, including fillings, crowns, root canals, and extractions. Dental implants, bridges, and dentures are eligible if medically necessary to restore tooth function or address a specific dental condition. Orthodontic treatments, including braces and clear aligners, qualify when they address dental diseases or affect body function, often because improperly spaced teeth can lead to broader dental problems.

Ineligible Dental Expenses

While many dental procedures qualify, certain expenses cannot be paid with HSA funds. The IRS distinguishes between medical necessity and purely cosmetic enhancements. Procedures solely to improve appearance, not to treat a medical condition or prevent disease, are generally ineligible.

This category includes cosmetic procedures like teeth whitening, veneers for aesthetic reasons, and other treatments whose primary purpose is cosmetic. Over-the-counter dental products like toothpaste, toothbrushes, mouthwash, and floss are generally not eligible, unless prescribed by a dentist to treat a medical condition. Using HSA funds for ineligible expenses can result in the distributed amount being subject to income tax and a 20 percent penalty if the account holder is under age 65.

Using Your HSA for Dental Care

Accessing HSA funds for qualified dental expenses offers several methods. Many HSA providers issue a debit card, allowing direct payment for services at the time of care. This simplifies the process, as funds are directly debited from the HSA.

Alternatively, individuals can pay for eligible dental services out-of-pocket and then reimburse themselves from their HSA. This provides flexibility, as there is no deadline for reimbursement; funds can be withdrawn years after the expense was incurred, provided proper records are maintained. HSA funds can also be linked to a health insurance plan, allowing for direct payment of deductibles, copayments, or coinsurance amounts not covered by dental insurance.

Record Keeping for Dental Expenses

Maintaining accurate records for all dental expenses paid with HSA funds is important. The account holder is ultimately responsible for proving the eligibility of expenditures, particularly in the event of an IRS audit. Documentation includes detailed receipts or invoices from the dental provider, showing the services rendered and cost.

Explanation of Benefits (EOB) statements from an insurance provider, if applicable, also serve as proof of services received and amounts paid. Records should be kept for at least as long as the income tax return is considered open (typically three years after filing), or for as long as the HSA is maintained, whichever is longer. Proper record-keeping helps avoid penalties on distributions that cannot be proven as qualified medical expenses.