ALL the Things You Can Use Your HSA and FSA for
Health care expenses can be a real drag on your budget, but HSAs and FSAs can help bring down your out-of-pocket costs. They can be used for typical stuff like prescriptions, over-the-counter drugs, and medical bills that go toward your deductible—but other out-of-the-box things are also covered.
Turns out HSA and FSA dollars can be used for service animals, high-end skincare products, and other random costs that might surprise you. Let’s dig into the details so you can start saving.
HSA vs. FSA
Health savings accounts (HSAs) and flexible spending accounts (FSAs) are structured a little differently, but you can use either one to cover qualified health care expenses. Before we get into all the surprising things that might include, here’s a quick refresher of how these accounts work.
HSAs
These are designed for folks who have a high-deductible health plan. To qualify for an HSA, the minimum deductible for an individual is $1,400 ($2,800 for families). This type of account has three big tax advantages:
The money you put in is tax-deductible, so it lowers your taxable income today. (Score!)
Your money grows tax-free.
You won’t be taxed on withdrawals that are used to pay for qualified medical expenses.
Contribution limits apply. In 2022, you can kick in up to $3,650 for individual coverage; $7,300 for family coverage. An HSA can be offered as an employee benefit, or you can simply open one yourself. One other perk: once you turn 65, you can use HSA funds for anything you want—not just medical costs. You’ll be taxed on these distributions, but it’s still a handy way to build up your nest egg.
FSAs
An FSA is only available as an employee benefit. So if you don’t have access to one through work, you’re out of luck. There are a few different types, but we’ll focus on health FSAs here. You can contribute up to $2,850 per year, though some employers may have lower limits. FSAs are funded with pretax earnings—and you won’t pay taxes on funds that are used to cover qualified medical expenses.
One downside is that, unlike HSAs, FSAs are use-it-or-lose-it accounts. If you have funds left over at the end of your plan year, your employer might give you a two-and-a-half-month grace period to spend it, or allow you roll over up to $570 into the next year.
10 Surprising Things You Can Use Your HSA and FSA for
1. Service Animals
Have a guide dog or other service animal? Expenses related to buying, training and keeping them are covered. This typically includes food, grooming and veterinary care. Just keep in mind that emotional support animals are excluded. One other thing: you’ll need a letter of medical necessity for your service animal to be covered.
2. Prenatal and Postnatal Gear
Essentials like prenatal vitamins and belly support wraps are covered. Even fertility treatments are on the table. After bringing home baby, you may need a breast pump, breastfeeding supplies, and other everyday gear. You can add postpartum underwear, nursing bras and maxi pads to the list.
3. Certain Skincare Products
Luxury sunscreens, anti-itch lotions, and certain acne treatments are on the list of covered expenses; good news for folks with sensitive skin.
4. Sterilization
Whether you’re “getting your tubes tied” or opting for a vasectomy, sterilization is covered.
5. Stop-Smoking Programs
Looking to quit smoking? Cessation products like nicotine gum and patches count as qualified medical expenses. Counseling and coaching programs are included too.
6. Travel
If you have to hit the road to receive medical services, some travel costs are covered. This includes money spent on car rentals and public transportation. The same goes for parking and tolls. And hang onto your gas receipts; you could be reimbursed for fuel costs.
7. Weight-Loss Programs
A weight-loss program counts as a medical expense if it’s required to treat a diagnosed disease like obesity, heart disease or hypertension. You’ll need a letter from your physician to get approval. If so, weight-loss programs like Noom and Jenny Craig are covered. Dietician services, diet pills and exercise equipment might also be included, depending on your doctor’s recommendations.
8. Wigs
Those suffering from illness-related hair loss can use HSA or FSA funds to buy wigs. They’ll just need a letter of medical necessity from a health care provider confirming it’s necessary for their mental health.
9. Family Planning Products
Birth control prescriptions make the list of covered expenses, right alongside condoms and the morning-after pill.
10. Mental Health Therapy
If you receive a letter of medical necessity, you can use HSA or FSA money to pay for mental health therapy. The catch is that it has to be required for a medical or mental purpose. Family counseling, for example, is off limits.
Being strategic about how you approach your health care expenses can help keep your budget intact—and allow you to get the most out of your HSA or FSA. Confused about how it works? We’re here to fill in the blanks if you need it.