Is Collagen an HSA-Eligible Expense?

Health Savings Accounts (HSAs) serve as tax-advantaged savings vehicles designed to help individuals manage healthcare expenses. Understanding the specific criteria for what constitutes an HSA-eligible expense, such as collagen, is important for effectively utilizing these accounts and making informed spending decisions.

General HSA Eligibility Rules

For an expense to qualify for HSA eligibility, it must meet the Internal Revenue Service (IRS) definition of “medical care.” This definition, outlined in IRS Publication 502, includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. Expenses must be primarily for medical care, not merely for general health improvement or well-being. Products or procedures aimed at cosmetic enhancement or general wellness are not considered eligible.

Collagen as a Medical Expense

Collagen, when used for general wellness, beauty, or cosmetic purposes, such as enhancing skin elasticity, promoting hair growth, or providing routine joint support without a specific medical diagnosis, is not considered an HSA-eligible expense. These uses are viewed as beneficial to general health rather than treating a specific medical condition. However, collagen could be eligible if a licensed medical practitioner prescribes it to treat a specific diagnosed medical condition, disease, or injury.

Examples of such specific conditions include severe connective tissue disorders, certain wound healing protocols, or diagnosed bone density issues like osteoporosis, where collagen is part of a prescribed treatment plan. In these instances, the primary purpose of the collagen shifts from general wellness to targeted medical treatment. A requirement for eligibility in these cases is a “Letter of Medical Necessity” (LOMN) from the prescribing medical professional.

Substantiating Collagen Eligibility

Taxpayers must maintain documentation to substantiate a collagen expense as HSA-eligible, especially when it falls under the “medically necessary” exception. This documentation is important for IRS audits or HSA administrator reviews. The primary document required is a Letter of Medical Necessity (LOMN) from a qualified medical professional.

The LOMN should state the specific medical condition being treated, the reason collagen is prescribed as part of the treatment plan, and the recommended duration or dosage. Receipts for the collagen product are necessary, showing the date of purchase, the vendor, the product name, and the exact cost. Any other relevant medical records that support the diagnosis and the prescribed treatment can further strengthen the claim. HSA account holders are responsible for self-substantiating expenses, and retaining these documents for at least seven years is advisable.

Using Your HSA Funds

Once collagen eligibility is determined and all necessary documentation, including a Letter of Medical Necessity and receipts, has been gathered, HSA funds can be used. There are two methods for utilizing HSA funds for eligible expenses. Account holders can use an HSA debit card directly at the point of purchase.

Alternatively, individuals may pay for the collagen out-of-pocket and then reimburse themselves from their HSA. This reimbursement process often involves submitting a request through the HSA provider’s online portal or by mailing in documentation. Regardless of the payment method, it is important to maintain records of the Letter of Medical Necessity, receipts, and any other supporting medical documentation. These records are essential for tax purposes and potential audits, even after the funds have been disbursed or reimbursed.