Can You Use Your HSA for Lip Fillers?

Health Savings Accounts (HSAs) offer a tax-advantaged way for individuals to save and pay for healthcare expenses. Understanding which expenses qualify for HSA funds is important for account holders to maximize benefits and remain compliant with tax regulations.

Qualified Medical Expenses for HSAs

The Internal Revenue Service (IRS) defines “qualified medical expenses” in publications like IRS Publication 502. These are generally costs for the diagnosis, cure, mitigation, treatment, or prevention of disease. They also include expenses for treatments affecting any body structure or function. Common examples include doctor’s office visits, prescription medications, and dental care such as cleanings, fillings, and orthodontics.

Vision care, including eye exams, prescription eyeglasses, and contact lenses, typically qualifies. Certain medical equipment, supplies, and diagnostic devices are also eligible. Expenses must be primarily for medical care to address a specific illness or condition, not simply to promote general health. For example, vitamins or supplements for general wellness are usually not qualified medical expenses unless prescribed for a specific medical condition.

HSA Rules for Cosmetic Treatments

As a general rule, cosmetic procedures are not qualified medical expenses for HSA purposes. This exclusion applies because these procedures are typically performed solely to improve appearance and do not serve a medical purpose. The IRS specifies that procedures like lip fillers, Botox injections for cosmetic reasons, hair removal, or elective cosmetic surgery are generally ineligible.

A narrow exception exists where a cosmetic procedure might qualify for HSA coverage. If the procedure is necessary to ameliorate a deformity from a congenital abnormality, a personal injury, or a disfiguring disease, it may be eligible. For example, reconstructive surgery following an accident or breast reconstruction after a mastectomy due to cancer could qualify. This distinction emphasizes that the procedure’s purpose must be medical, not merely aesthetic, to be covered by an HSA.

How to Use Your HSA

Individuals can use HSA funds for eligible medical expenses through various methods. A common approach involves using an HSA debit card directly at the point of service, similar to a regular bank card. Many HSA providers also offer online platforms for payments to healthcare providers or transferring funds. Another option is to pay for qualified medical expenses out-of-pocket and then reimburse oneself from the HSA.

When reimbursing out-of-pocket expenses, it is permissible to do so at any time, even years later, provided the expense was incurred after the HSA was established. Regardless of the payment method, maintain meticulous records of all transactions. Keeping receipts and detailed documentation for every qualified medical expense is essential for tax purposes and in case of an IRS audit. Without proper documentation, distributions for non-qualified expenses may be subject to income tax and a potential 20% penalty if the account holder is under 65.