Can You Use Your HSA to Buy Sunscreen?

A Health Savings Account (HSA) is a tax-advantaged savings account designed specifically for healthcare expenses. It provides a way for individuals with high-deductible health plans to save and pay for qualified medical costs on a pre-tax or tax-deductible basis. This financial tool allows the funds to grow tax-free, and withdrawals for eligible expenses are also tax-free, offering a triple tax advantage.

Understanding HSA Eligible Expenses

The Internal Revenue Service (IRS) defines what constitutes a qualified medical expense for HSA purposes. These expenses align with the definition of “medical care” under Internal Revenue Code Section 213(d). This definition includes 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. Expenses must primarily serve a medical purpose rather than merely benefiting general health. For instance, common items such as toothpaste or health club dues are not considered eligible because their primary purpose is not medical care.

Prior to 2020, many over-the-counter (OTC) medications and health products required a doctor’s prescription to be HSA eligible. However, the CARES Act, enacted in March 2020, changed this requirement. As of January 1, 2020, OTC medications and products, including certain items like menstrual care products, became eligible for HSA reimbursement without a prescription. This change broadened the scope of eligible expenses.

Sunscreen Eligibility and Conditions

Sunscreen is an eligible expense for reimbursement through a Health Savings Account. This eligibility is due to its recognized role in preventing skin cancer and other sun-related skin conditions. To qualify, sunscreen must meet specific criteria related to its protective capabilities.

Eligible sunscreens must have a minimum Sun Protection Factor (SPF) of 15 or higher. They need to offer broad-spectrum protection, meaning they protect against both UVA and UVB rays. While some cosmetic products may contain SPF, the primary purpose of the product must be sun protection for medical care, not merely general cosmetic enhancement. Therefore, products marketed primarily as suncare are eligible.

Using Your HSA and Record Keeping

When using your HSA funds for eligible purchases like sunscreen, there are two common methods. You can use an HSA-linked debit card directly at the point of sale. Alternatively, you can pay for the eligible expense out-of-pocket and then seek reimbursement from your HSA. Many HSA providers offer online portals or mobile apps where you can submit claims for reimbursement, often by linking your bank account for direct deposit.

Record-keeping is required for all HSA transactions, particularly for tax purposes and in case of an IRS audit. Retain receipts showing the purchase date, item description (e.g., sunscreen), and amount paid. These records serve as proof that the distributions from your HSA were for qualified medical expenses, were not reimbursed from another source, and were not claimed as an itemized deduction on your tax return. While there is no specific time limit, it is advisable to keep records for at least as long as your tax return remains open for audit, typically three to six years.