Can You Buy Melatonin With Your HSA Funds?
Understand HSA eligibility for melatonin. Learn how medical necessity and documentation enable tax-advantaged health purchases.
Health Savings Accounts (HSAs) serve as tax-advantaged savings vehicles designed to help individuals cover qualified healthcare expenses. These accounts allow for pre-tax contributions, which can grow tax-free, and withdrawals remain tax-free when used for eligible medical costs. Understanding what constitutes a qualified medical expense is important for maximizing the benefits of an HSA.
Melatonin Eligibility for HSA Funds
The Internal Revenue Service (IRS) defines qualified medical expenses as costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any part or function of the body, as outlined in Section 213(d) of the Tax Code. Historically, many over-the-counter (OTC) medicines and drugs required a prescription for HSA reimbursement. However, the CARES Act, enacted in 2020, eliminated this prescription requirement, making most OTC medicines and drugs eligible for HSA funds without a doctor’s note.
Melatonin is typically categorized as a dietary or nutritional supplement rather than a conventional OTC medicine or drug. As such, melatonin does not qualify as an HSA-eligible expense for general wellness or routine use. Its eligibility depends on meeting specific IRS criteria for supplements, requiring a recommendation from a medical practitioner for the treatment of a specific medical condition diagnosed by a physician.
The Medical Necessity Requirement
For melatonin to be an eligible HSA expense, a Letter of Medical Necessity (LMN) or a prescription from a licensed healthcare provider is necessary. This document establishes that the melatonin purchase is not for general health enhancement but is specifically for the diagnosis, cure, mitigation, treatment, or prevention of a physical or mental illness. The LMN must clearly link the use of melatonin to a diagnosed medical condition, demonstrating its role as part of a treatment plan.
An LMN should include information to satisfy IRS guidelines. It must specify the patient’s name, medical history, and a clear diagnosis of the condition being treated. The letter should explain how melatonin will help prevent or treat the diagnosed condition and indicate the recommended dosage and duration of use. The healthcare provider’s name, professional credentials, contact information, and signature are required to validate the document.
Documenting Your Melatonin Purchase
Proper documentation is important for substantiating any HSA expenditure, including melatonin purchases that meet medical necessity criteria. Account holders should retain both the original purchase receipt for melatonin and the corresponding Letter of Medical Necessity or prescription. The receipt should clearly display the date of purchase, the specific item, and the cost. This record-keeping ensures that if the IRS or HSA administrator requests verification, all necessary proof is readily available.
These documents serve as evidence that the melatonin purchase was for a qualified medical expense, not for general health purposes. While HSA administrators do not typically require submission of receipts for every transaction, the responsibility for proving expense eligibility rests with the account holder in the event of an audit. Maintaining organized records simplifies the substantiation process and helps prevent potential tax penalties on non-qualified distributions.