Does an HSA Cover Dental and Vision?
Demystify HSA coverage for dental and vision. Learn which expenses qualify and gain crucial insights for managing your health savings account effectively.
Health Savings Accounts (HSAs) offer a tax-advantaged way to save and pay for qualified medical expenses. These accounts are designed for individuals enrolled in a high-deductible health plan (HDHP), allowing tax-deductible contributions, tax-free growth, and tax-free withdrawals for eligible healthcare costs. A common inquiry among those with HSAs is whether these funds can be applied to dental and vision care. This article explores the specific types of dental and vision expenses that qualify for HSA reimbursement, along with important considerations for managing these funds.
Qualifying Dental Expenses
Many routine and necessary dental procedures are considered qualified medical expenses for HSA purposes. This includes costs associated with the diagnosis, cure, mitigation, treatment, or prevention of disease affecting the teeth and gums. Examples of eligible services include professional cleanings, fillings for cavities, tooth extractions, and root canals.
Orthodontia, such as braces, is also typically covered if it addresses a medical need. Additionally, expenses for dentures, bridges, and crowns are generally eligible. These dental expenses are permissible because they relate to the structure and function of the body, aligning with the IRS’s definition of medical care.
Qualifying Vision Expenses
Similar to dental care, a wide range of vision-related expenses qualify for HSA reimbursement. This encompasses costs for comprehensive eye examinations, which are essential for maintaining ocular health. Funds can also be used for prescription eyeglasses and contact lenses, including solutions necessary for their care.
Medically necessary eye surgeries, such as cataract surgery, are covered. Laser eye surgery, like LASIK, is also typically an eligible expense when performed to correct vision. These vision expenses are considered qualified because they involve treatments affecting the function of the eye.
Non-Qualifying Expenses and Important Considerations
While HSAs cover a broad spectrum of medical expenses, certain dental and vision procedures are generally not eligible. Cosmetic procedures, such as teeth whitening or purely cosmetic contact lenses, are typically excluded unless they are necessary to alleviate a physical defect or illness. Expenses that are merely beneficial to general health, like routine toothpaste or non-corrective blue-light glasses, are also typically not covered.
Proper record-keeping is important when using HSA funds. Account holders must retain detailed records, including receipts and Explanation of Benefits (EOB) statements, for all reimbursed expenses. These records are essential to demonstrate that distributions were exclusively for qualified medical expenses and were not reimbursed from other sources or taken as an itemized deduction.
Expenses must have been incurred after the HSA was established to be eligible for tax-free reimbursement. The IRS requires these records be maintained for as long as a tax return is open to audit, which is typically three years, or longer if the HSA account remains open.