Can You Use an HSA for Dental Expenses?

A Health Savings Account (HSA) offers individuals a tax-advantaged way to save and pay for qualified medical expenses. These accounts are available to those enrolled in a high-deductible health plan (HDHP). Contributions to an HSA are tax-deductible, the funds grow tax-free, and withdrawals for eligible medical expenses are also tax-free. This triple tax advantage makes HSAs a valuable tool for managing healthcare costs.

Eligible Dental Expenses

Many dental procedures and services qualify as eligible expenses for HSA reimbursement. The Internal Revenue Service (IRS) defines qualified medical expenses as costs primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body.

Common eligible dental expenses include routine check-ups, professional cleanings, and X-rays. Restorative procedures such as fillings, root canals, and extractions are also covered. Complex treatments like crowns, bridges, and dentures are HSA-eligible when used to restore dental function or address a medical condition.

Orthodontic treatments, including traditional braces and clear aligners, are eligible because improperly aligned teeth can lead to dental problems requiring medical intervention. Dental implants, used to replace missing teeth, are covered if they address a medical need. Even sealants applied for disease prevention can be paid for with HSA funds.

Ineligible Dental Expenses

While many dental costs are HSA-eligible, certain expenses are specifically excluded because they are not considered medical care by the IRS. These involve procedures or products that are purely cosmetic or for general health maintenance without addressing a specific medical condition. Using HSA funds for non-qualified expenses can result in taxes and penalties.

For example, teeth whitening procedures are not eligible for HSA reimbursement as they are for aesthetic enhancement. Similarly, veneers, unless medically necessary to correct a deformity or injury, are excluded. Daily oral hygiene products such as toothbrushes, toothpaste, dental floss, and mouthwash are considered general health items and do not qualify for HSA use.

Using Your HSA for Dental Services

Accessing your HSA funds for dental care is straightforward and offers flexibility. Many HSA providers issue a dedicated debit card, which can be used directly at the dental office at the time of service. This method provides immediate payment from your account.

Alternatively, you can pay for dental services out-of-pocket and then reimburse yourself from your HSA. You submit a request for reimbursement to your HSA administrator, providing documentation of the qualified expense. There is no time limit for when you can reimburse yourself for past qualified expenses, as long as the expense was incurred after your HSA was established.

Record Keeping

Maintaining thorough records of all HSA transactions is important for tax compliance and potential IRS audits. You are responsible for substantiating that all distributions were for qualified medical expenses. The IRS requires account holders to keep records showing that HSA distributions were used exclusively for qualified medical expenses, had not been previously reimbursed, and were not claimed as an itemized deduction.

Documentation to keep includes itemized receipts from your dental provider. Explanation of Benefits (EOB) statements from your dental insurance company can also serve as proof. It is advisable to retain these records for at least three years after filing your tax return, or longer if you continue to maintain the HSA.