Can I Use My HSA for Testosterone Therapy?

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals cover qualified healthcare expenses. These accounts are linked to high-deductible health plans (HDHPs), allowing funds to be contributed, grow, and be withdrawn tax-free for eligible medical costs. This financial tool prompts inquiries into the eligibility of various medical treatments, including testosterone therapy.

General HSA Eligibility for Medical Expenses

The Internal Revenue Service (IRS) defines what constitutes a “qualified medical expense” for HSA purposes. According to IRS Publication 502, these expenses are primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. This definition covers a wide range of services and products intended to address a physical or mental defect or illness.

Common examples of eligible expenses include doctor visits, prescription medications, hospital stays, and laboratory fees. However, expenses incurred merely for general health improvement or cosmetic purposes, without medical necessity, are not eligible. For instance, vitamins not prescribed for a specific condition or cosmetic surgery solely for appearance enhancement do not qualify.

Qualifying for Testosterone Therapy Expenses

Testosterone therapy can be a qualified medical expense for HSA purposes if prescribed by a licensed medical professional to treat a diagnosed medical condition. The therapy must be medically necessary, addressing a legitimate health issue rather than being for cosmetic enhancement, athletic performance, or general “anti-aging” without an underlying diagnosis. For example, treatment for hypogonadism, a condition characterized by chronically low testosterone levels due to medical problems, qualifies.

Eligible expenses include consultations with healthcare providers, necessary blood tests to diagnose and monitor testosterone levels, and the cost of prescribed medication. This also extends to supplies for administering the therapy, such as injection supplies. However, if testosterone therapy is sought purely for aesthetic reasons or to address the natural decline in testosterone associated with aging without a diagnosed medical condition, it is not eligible.

Using Your HSA for Medical Expenses

Utilizing HSA funds for qualified medical expenses, including eligible testosterone therapy, offers several methods. Many HSA providers issue a debit card for direct use at the point of service, such as a doctor’s office or pharmacy. Alternatively, individuals can pay for expenses out-of-pocket and then reimburse themselves from their HSA, either through online transfers to a personal bank account or by writing a check. This reimbursement can occur anytime, even years after the expense was incurred, as long as the HSA was established before the expense.

Maintaining detailed records of all expenses paid with HSA funds is important. This documentation should include receipts, Explanation of Benefits (EOB) statements from the health insurance provider, and any doctor’s notes or prescriptions that demonstrate the medical necessity of the treatment. These records are important in the event of an IRS audit, as individuals are responsible for proving that withdrawals were for qualified medical expenses. Failure to substantiate the eligibility of an expense can result in the withdrawal being subject to income tax and a potential 20% penalty if the account holder is under age 65.