Is Hand Sanitizer an HSA Eligible Expense?

Health Savings Accounts (HSAs) are tax-advantaged savings accounts designed to help individuals manage healthcare costs. These accounts are specifically paired with high-deductible health plans (HDHPs), offering a unique financial tool for medical expenses. Contributions to an HSA are typically tax-deductible, and the funds can grow tax-free. When used for qualified medical expenses, withdrawals are also free from federal income tax.

Eligibility of Hand Sanitizer

Hand sanitizer is an eligible expense for Health Savings Accounts. The Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 established this eligibility by expanding the list of eligible expenses. The Act made over-the-counter medical products, including hand sanitizer, eligible for HSA reimbursement without a doctor’s prescription.

The Internal Revenue Service (IRS) clarified that personal protective equipment (PPE), such as hand sanitizer and sanitizing wipes, qualifies as medical care. This applies when these items are used for preventing the spread of disease, like COVID-19. This change is a permanent eligibility adjustment.

General Eligibility for Medical Expenses

To qualify as an HSA-eligible medical expense, an item or service must primarily be for the diagnosis, cure, mitigation, treatment, or prevention of disease. It can also be for affecting any structure or function of the body. This definition is outlined by the IRS in Publication 502.

Common examples of eligible expenses include payments to doctors, dentists, and other medical professionals, as well as prescription medications. Deductibles, copayments, and coinsurance for health services are also typically covered. Expenses for general health, such as vitamins, or cosmetic procedures, generally do not qualify unless medically necessary.

Using Your HSA

Using your Health Savings Account for eligible expenses is a straightforward process. Many HSA providers issue a debit card, which allows for direct payment at the point of service, much like a regular bank card. You can swipe this card at a doctor’s office, pharmacy, or other healthcare providers.

If you pay for an eligible expense out-of-pocket, you can typically submit a claim to your HSA administrator for reimbursement. This allows you to pay for the expense with personal funds and then transfer money from your HSA to your personal bank account. It is important to maintain records, including receipts and medical statements, for all HSA-funded purchases and reimbursements. These records are for tax purposes and to demonstrate that withdrawals were for qualified medical expenses, especially during an IRS audit.