Can You Use Your HSA for a Root Canal?

A Health Savings Account (HSA) functions as a tax-advantaged savings account specifically designed for healthcare expenses. It offers a triple tax advantage: contributions may be tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free. Many individuals with high-deductible health plans use HSAs to manage their healthcare costs, often wondering about the eligibility of various medical services.

Defining Eligible Medical Expenses

The Internal Revenue Service (IRS) establishes clear guidelines for what constitutes an “eligible medical expense” for HSA purposes. These expenses are defined as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. This broad definition covers a wide range of services and products intended to alleviate or prevent a physical or mental disability or illness.

Common examples of eligible medical expenses include visits to a doctor or specialist, prescription medications, hospital services, laboratory fees, ambulance services, and necessary medical equipment.

Dental Care and Health Savings Accounts

Dental care, including significant procedures like root canals, is an eligible medical expense under IRS guidelines. The IRS includes amounts paid for the prevention and alleviation of dental disease as qualified medical expenses, allowing HSA funds for a wide array of dental services.

Routine dental services such as cleanings, fluoride treatments, and X-rays are eligible expenses. More involved procedures like fillings, crowns, extractions, orthodontia (including braces), dental implants, and bridges also qualify, especially when addressing a dental disease or affecting mouth function.

How to Use Your HSA Funds

Utilizing HSA funds for qualified medical expenses offers flexibility in payment methods. Many HSA providers issue a debit card that can be used directly at the time of service, similar to a regular bank card, to cover costs at a doctor’s office, pharmacy, or dental clinic.

Alternatively, individuals can pay for qualified medical expenses out-of-pocket and then reimburse themselves from their HSA at a later time. This reimbursement can occur anytime, even years after the expense was incurred, provided the HSA was established before the expense. Reimbursement methods often include online transfers from the HSA to a personal bank account or writing a check from the HSA.

Maintaining meticulous records of all medical expenses paid with HSA funds is important for tax purposes. Documentation must be retained in case of an IRS audit. These records should clearly show that distributions were used exclusively for qualified medical expenses and were not reimbursed from another source or taken as an itemized deduction.