Can You Use Your HSA to Pay for Sunscreen?

Health Savings Accounts (HSAs) offer a tax-advantaged way for individuals to save and pay for qualified medical expenses. Available to those with a high-deductible health plan, contributions are pre-tax, grow tax-free, and can be withdrawn tax-free for eligible healthcare costs. A common question concerns the eligibility of everyday products like sunscreen for HSA reimbursement.

Sunscreen Eligibility for HSA

The Internal Revenue Service (IRS) defines qualified medical expenses broadly under Internal Revenue Code Section 213(d) as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. While this definition typically excludes items solely for general health, certain preventative products can qualify. Since the CARES Act, OTC products, including sunscreen, no longer require a prescription to be eligible.

For sunscreen to be an eligible HSA expense, it must be broad-spectrum, meaning it protects against both UVA and UVB rays, and have a minimum Sun Protection Factor (SPF) of 15 or higher. This classification recognizes sunscreen’s role in preventing skin damage and reducing the risk of skin cancer, aligning it with the preventative aspect of qualified medical expenses. Many retail outlets and online stores clearly label sunscreens that meet these eligibility requirements.

It is important to differentiate this from general cosmetic items or products with minimal SPF not primarily for sun protection. The IRS guidance focuses on the product’s primary purpose. A basic moisturizer with a low SPF, for example, might not qualify unless its primary function is broad-spectrum sun protection at or above the SPF 15 threshold.

Using Your HSA for Eligible Purchases

Once an expense, such as eligible sunscreen, is qualified, using your HSA funds is straightforward. Most HSA providers issue a debit card linked to your account, allowing for direct payment at the point of sale. This offers immediate access to your tax-advantaged funds for healthcare goods and services. You can use this card at pharmacies, doctor’s offices, or other retailers that accept debit card payments.

Alternatively, you can pay for eligible expenses out-of-pocket and then reimburse yourself from your HSA. This method is common for maximizing HSA fund growth, as there is typically no deadline for reimbursement, provided the expense was incurred after your HSA was established. To reimburse yourself, initiate a transfer from your HSA to your personal bank account through your provider’s online portal or mobile app.

Maintaining thorough records is an important responsibility for all HSA account holders. For every qualified medical expense, keep itemized receipts, Explanation of Benefits (EOB) statements from your health insurer, or any doctor’s notes or prescriptions that support medical necessity. These documents serve as proof of eligibility in case of an IRS audit, which could occur years after the expense. Failure to substantiate a withdrawal could result in the amount being treated as taxable income, plus a potential 20% penalty if you are under age 65.