How to Claim HSA Reimbursement for Medical Expenses

A Health Savings Account (HSA) allows you to pay for current medical costs and save for future needs with tax advantages. When you pay for a healthcare cost with your own money instead of your HSA debit card, you can pay yourself back from the account. This process, an HSA reimbursement, lets you take a tax-free distribution for qualified medical expenses you paid out-of-pocket.

Identifying Qualified Medical Expenses

To be eligible for a tax-free reimbursement from your HSA, an expense must meet the Internal Revenue Service (IRS) definition of a qualified medical expense. The primary rule, as outlined in IRS Publication 502, is that the cost must be for the diagnosis, cure, mitigation, treatment, or prevention of disease. Expenses that are merely for general health, such as non-prescribed vitamins or a gym membership for general fitness, do not qualify.

Common examples of qualified expenses include:

• Payments for deductibles, copayments, and coinsurance
• Dental treatments, such as fillings and braces
• Vision care, including eye exams, prescription eyeglasses, and contact lenses
• Prescription medications and over-the-counter drugs like pain relievers and allergy medicines
• Ambulance services and hearing aids
• Smoking cessation programs and psychiatric care

Conversely, some expenses are explicitly excluded. Cosmetic surgery is not a qualified expense unless it is necessary to improve a deformity arising from a congenital abnormality, an accident, or a disfiguring disease. Other non-qualified expenses include teeth whitening, maternity clothes, and health club dues. Insurance premiums are not reimbursable from an HSA, with limited exceptions for COBRA continuation coverage, Medicare premiums once you reach age 65, and long-term care insurance premiums.

Gathering Necessary Documentation

Before you can request a reimbursement, you must have specific documentation to prove the expense was qualified. While you do not need to submit receipts with your reimbursement request, the IRS requires you to keep them in case of an audit. Failure to provide proof that a distribution was for a qualified medical expense can result in the withdrawal being taxed as income, plus a 20% penalty.

The essential proof is an itemized receipt from the provider or an Explanation of Benefits (EOB) from your insurer. This documentation must clearly show the name of the provider, the date the service was rendered, a specific description of the service or product, and the amount you paid out-of-pocket. The date of service is important, as it may differ from the date you paid the bill.

A simple credit card receipt or bank statement is insufficient on its own. These documents typically only show the date of payment and the amount, but they lack the detailed description of what was purchased. Always make a habit of requesting an itemized receipt at the time of service.

Step-by-Step Guide to Requesting Reimbursement

Once you have confirmed your expense is qualified and have the necessary documentation on hand, you can proceed with the reimbursement request. Most HSA administrators offer several convenient methods for you to pay yourself back, usually through a direct deposit to a linked personal bank account or a physical check mailed to you.

The most common approach is through an online portal. This typically involves logging into your account on the administrator’s website, navigating to a section for reimbursements, and entering the expense details. You then select how you want to receive the funds.

Many administrators also offer a mobile application that mirrors the functionality of the online portal. An advantage of using a mobile app is the ability to upload a photo of your receipt or EOB directly from your phone. For those who prefer it, a paper-based reimbursement form is often available for download from the administrator’s website, which you would complete and mail in.

Timing and Record-Keeping Rules

One of the most flexible features of an HSA is that there is no deadline for reimbursing yourself for a qualified medical expense. As long as the expense was incurred after you officially established your HSA, you can request reimbursement at any point in the future, whether it’s months, years, or even decades later.

For example, if you opened your HSA in 2020 and paid for a qualified medical procedure out-of-pocket that same year, you could reimburse yourself for that expense in 2025 or beyond, provided you have the funds in your account. This rule allows you to use your HSA as a long-term investment vehicle, letting the funds grow tax-free and taking reimbursements later in life, such as during retirement. The only timing requirement is that you cannot reimburse yourself for medical expenses that occurred before your HSA was established.

Your record-keeping obligations are also important. While the IRS requires you to keep records for at least three years for audit purposes, it is highly recommended to keep all supporting documents for as long as your HSA is open. This is especially critical if you plan to delay reimbursements, as you will need proof of the original expense years later.