When Is Finasteride an HSA-Eligible Expense?
Navigate the rules for Finasteride's HSA eligibility. Learn how medical necessity determines if your prescription costs qualify for Health Savings Account coverage.
A Health Savings Account (HSA) offers a tax-advantaged way to save and pay for healthcare costs. This article clarifies when Finasteride, a common medication, is considered an HSA-eligible expense.
Understanding Health Savings Accounts
A Health Savings Account is a personal savings account designed to help individuals save for qualified medical expenses on a tax-advantaged basis. Contributions made to an HSA are tax-deductible, the funds grow tax-free, and withdrawals for eligible medical expenses are also tax-free. This triple tax advantage makes HSAs a beneficial tool for healthcare savings.
To be eligible for an HSA, an individual must be covered by a High Deductible Health Plan (HDHP). For 2025, an HDHP must have a minimum annual deductible of $1,650 for self-only coverage or $3,300 for family coverage. Additionally, the plan’s out-of-pocket maximums cannot exceed $8,300 for self-only coverage or $16,600 for family coverage in 2025. Individuals cannot be enrolled in Medicare or be claimed as a dependent on someone else’s tax return.
Annual contribution limits apply to HSAs. For 2025, individuals with self-only HDHP coverage can contribute up to $4,300, while those with family HDHP coverage can contribute up to $8,550. Individuals aged 55 and over can contribute an additional catch-up contribution of $1,000 per year. Funds in an HSA roll over year to year and can be used indefinitely for qualified medical expenses.
Defining Qualified Medical Expenses
The Internal Revenue Service (IRS) outlines what constitutes a “qualified medical expense.” These are generally costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. This broad definition covers a wide range of services and products, including payments to physicians, hospital services, and prescribed medications.
Prescription medications are typically considered qualified medical expenses if they are prescribed by a licensed medical professional for a legitimate medical condition. This includes both generic and brand-name drugs. However, expenses for general health, cosmetic purposes, or to improve appearance are generally not eligible.
Examples of commonly eligible expenses include doctor visits, dental treatments, eyeglasses, and insulin. Items like vitamins and supplements are not eligible unless prescribed for a specific diagnosed condition. Expenses for cosmetic procedures or hair re-growth supplies for purely aesthetic reasons are ineligible.
Finasteride’s HSA Eligibility
Finasteride, sold under brand names like Proscar and Propecia, treats two conditions in men: benign prostatic hyperplasia (BPH) and male pattern hair loss. Its HSA eligibility depends on the medical condition it is prescribed to treat.
When Finasteride is prescribed for a medical condition like Benign Prostatic Hyperplasia (BPH), it is considered an HSA-eligible expense. BPH involves an enlarged prostate, and its treatment falls under the IRS definition of medical care.
Finasteride is also commonly prescribed for male pattern baldness. If used solely for cosmetic purposes, such as to improve appearance by treating hair loss without an underlying medical necessity, it is not HSA eligible.
To ensure eligibility for Finasteride when used for a medical condition, individuals should obtain a prescription from a licensed physician. Retain documentation, such as the prescription and detailed receipts, to demonstrate the expense was for a diagnosed medical condition and not for cosmetic enhancement.