Can You Use HSA for Shoes? When They Qualify
Navigate HSA eligibility for shoes. Understand the nuances of medical necessity and documentation required for qualified expenses.
A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals covered by a high-deductible health plan (HDHP) save and pay for qualified medical expenses. HSAs offer tax benefits on contributions, earnings, and withdrawals when used for eligible expenses. This financial tool empowers individuals to manage their healthcare spending proactively and serves as a long-term savings vehicle for future medical needs.
Understanding HSA Eligibility for Medical Expenses
The Internal Revenue Service (IRS) defines a “qualified medical expense” as costs incurred 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 array of healthcare services and products. Eligible expenses include doctor visits, prescription medications, dental care, vision care, crutches, contact lenses, and certain costs for alcoholism or drug treatment programs.
These expenses must be incurred by the account holder, their spouse, or eligible dependents. Expenses for general health or those merely beneficial to overall well-being, such as vitamins or cosmetic procedures not related to disease or injury, do not qualify. The IRS provides guidance on eligible medical expenses in Publication 502.
When Are Shoes an Eligible HSA Expense?
Shoes can be considered an eligible HSA expense when they are medically necessary and prescribed for a specific medical condition. Regular, everyday footwear or fashion shoes are not eligible for HSA reimbursement. The distinction lies in the therapeutic purpose of the footwear.
To qualify, shoes must be prescribed by a physician or other qualified healthcare provider to alleviate or treat a specific medical condition. Examples include severe foot deformities, diabetes, plantar fasciitis, bunions, or post-surgical recovery. These are often orthopedic or therapeutic shoes, designed to address issues like alignment, pressure relief, or support beyond conventional footwear. Only the cost exceeding that of a normal pair of shoes may be eligible for reimbursement.
A Letter of Medical Necessity (LMN) from a healthcare professional is required to prove the medical necessity of the shoes. This letter should detail the patient’s diagnosis, explain why the specific footwear is necessary for treatment or alleviation of the condition, and indicate the duration of the treatment. Without this document, the expense is not considered eligible for reimbursement.
Documenting and Using Your HSA Funds
Once an expense is determined eligible, there are several ways to use your HSA funds. Many HSA providers offer a debit card for direct use at the point of purchase. Individuals can also pay for the expense out-of-pocket and then reimburse themselves from their HSA at a later time. This reimbursement can occur even years after the expense was incurred, provided proper documentation is maintained.
Maintaining thorough records for all HSA-funded expenses is important for tax purposes. This documentation should include detailed receipts, prescriptions, and any Letters of Medical Necessity. These records demonstrate to the IRS that withdrawals were used for qualified medical expenses, which is crucial if your tax return is audited. While you do not typically submit these records with your tax return, keeping them for at least three years, and potentially longer, is advised in case of an audit.