Can You Buy Diapers With an HSA Card?

Health Savings Accounts (HSAs) offer a tax-advantaged way to save and pay for qualified medical expenses. Paired with high-deductible health plans (HDHPs), these accounts allow pre-tax contributions that grow and can be withdrawn tax-free for eligible healthcare costs. Understanding what constitutes a qualified medical expense is important for maximizing HSA benefits.

HSA Eligibility for Diapers

Generally, diapers are not considered qualified medical expenses by the Internal Revenue Service (IRS) for HSA reimbursement. The IRS views infant diapers as items for general health and hygiene, not for the diagnosis, cure, mitigation, treatment, or prevention of a specific disease or medical condition. This classification means they are seen as ordinary household expenses.

Diapers may become HSA-eligible in narrow exceptions. If a doctor prescribes them for a specific medical condition, like incontinence from a diagnosed illness, they could qualify. A Letter of Medical Necessity (LMN) from a healthcare professional is required, detailing the diagnosis and how the diapers alleviate the condition. Adult diapers often qualify when used to manage incontinence due to a medical condition.

Distinguishing Eligible Medical Expenses

The IRS defines “medical care” as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any body structure or function (Internal Revenue Code Section 213(d)). This definition guides HSA eligibility. Expenses must primarily alleviate a physical or mental defect or illness, not merely benefit general health.

Common examples of qualified medical expenses include doctor visits, prescription medications, dental care, and vision care. These items directly relate to the treatment or prevention of specific health issues. Items like toothpaste, vitamins for general health, or cosmetic procedures do not qualify, as they are not for treating a diagnosed condition.

Using Your HSA for Qualified Purchases

When using your HSA for eligible expenses, there are two primary methods. You can use an HSA debit card directly at the point of sale, similar to a regular debit card, for qualified medical expenses. Many HSA providers offer this convenience for direct payment at healthcare providers or pharmacies.

Alternatively, you can pay for qualified medical expenses out-of-pocket and then reimburse yourself from your HSA later. This allows your HSA funds to grow tax-free over time before withdrawal. It is important to keep detailed records, such as receipts and Explanation of Benefits (EOBs) from your insurance, for all HSA transactions. These records are necessary to substantiate that withdrawals were for qualified medical expenses in case of an IRS audit, preventing potential penalties and taxes on non-qualified distributions.