Does HSA Cover LASIK? Using Your Account for Eye Surgery

Health Savings Accounts (HSAs) offer a tax-advantaged way to save for healthcare expenses, providing individuals with a dedicated fund for various medical needs. Laser-Assisted In Situ Keratomileusis (LASIK) is a popular surgical procedure designed to correct vision problems. Understanding how HSAs and LASIK intersect can help individuals manage vision correction costs.

LASIK as a Qualified Medical Expense

LASIK is a qualified medical expense for HSA purposes. This classification aligns with Internal Revenue Service (IRS) guidelines, which define qualified medical expenses under Internal Revenue Code Section 213. These expenses include 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. LASIK procedures, which correct refractive errors such as nearsightedness, farsightedness, or astigmatism, fall within this definition as they are performed to improve a bodily function. Funds from an HSA can be used for LASIK without incurring taxes or penalties.

Using Your HSA Funds for LASIK

Using HSA funds for LASIK offers practical payment methods. One approach involves using an HSA debit card at the time of service. Many HSA providers also facilitate online payments directly from the account or allow individuals to use checks for medical expenses. This direct payment method offers immediate access to tax-advantaged funds.

Alternatively, individuals can pay for LASIK out-of-pocket using personal funds and then reimburse themselves from their HSA. This process allows HSA funds to remain invested and potentially grow tax-free until needed. Reimbursement can occur at any time, even years later, provided the medical expense was incurred after the HSA was established. Maintaining detailed records, such as receipts and invoices from the LASIK provider, is essential for substantiating these expenses for tax purposes.

Important Considerations for HSA Use

Several practical aspects warrant attention when using HSA funds for LASIK. If the current HSA balance is insufficient, individuals can pay partially with HSA funds and cover the remainder with other resources. It is also possible to pay the entire cost out-of-pocket and then reimburse oneself from the HSA as future contributions accumulate. Some healthcare providers may also offer payment plans that align with an individual’s HSA contribution schedule.

Maintaining documentation is important for all HSA transactions. Individuals should retain all receipts, invoices, and explanations of benefits (EOBs) related to the LASIK procedure for several years, in case of an IRS audit. These records serve as proof that funds were used for qualified medical expenses. Using HSA funds for non-qualified expenses would result in the withdrawal being subject to income tax and a 20% penalty if the account holder is under 65 years old.