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March 4, 2021

What Not to Buy with Your HSA

By Crista Murray, Alliance Benefits

There is such a vast arena of what you can purchase with your Health Savings Account (HSA), but a few ineligible items may be confusing. For example, did you know that face masks are currently an ineligible expense? A product, service, or procedure must meet several criteria before earning HSA eligibility status.

To be considered HSA-eligible:

  1. An item, procedure, or service must be used to diagnose, cure, treat, mitigate and prevent a disease, injury, or symptom of a disease.
  2. The primary purpose of an item, procedure, or service must be for what is described in #1. It can’t be what is referred to as a dual-purpose item unless a physician prescribes it as being medically necessary

What is a dual-purpose item?

In essence, it is something that can be for medical or health purposes, but its primary use isn’t always for medical or health purposes.

A straightforward example would be, “I went to the doctor to diagnose and treat my cold, so my bill is HSA eligible.” The expense is eligible since it treated a disease, and the primary purpose of going to the doctor was to treat the condition.

But what about “My dentist told me to start flossing to prevent gingivitis, so my dental floss is eligible”? This expense meets the first requirement, but since you can use dental floss for other purposes, it’s considered a general health expense. Therefore, the expense is not eligible.

Here are a few more examples considered to be dual-purpose items and are either not eligible or require a letter of medical necessity (LMN) from your doctor before they can be reimbursed from your HSA:

  • Face masks
  • Hand sanitizer
  • Fitness tracker devices
  • Health club dues
  • Herbal medicines
  • Homeopathic remedies
  • Hormone therapy
  • Nasal strips 
  • Vaporizers/humidifiers
  • Vitamins/minerals/supplements
  • Swimming lessons
  • Weight loss programs
  • Dark chocolate (just making sure you’re still with us!)

The CARES Act has expanded HSA-eligible items to include telemedicine services, feminine hygiene products, and Over-the-Counter (OTC) medical products without requiring a prescription or letter of medical necessity from a physician. This change was effective as of March 27, 2020, and applies to all qualified purchases made after January 1, 2020.

It is important to note that these things now approved under the CARES Act still do not include any dual-purpose items as referenced above, such as vitamins and face masks.

Another thing to mention is that the testing and treatment of COVID-19 are considered eligible medical expenses per IRS Notice 2020-15. This means that you can use your HSA funds to pay for costs incurred for these purposes.

Why aren’t face masks and PPE items eligible?

The reasoning would say that because masks are CDC mandated, they should be an HSA-eligible expense. While a petition was initiated to make masks eligible, they are currently specified as ineligible. When researching this further, it seems that the main reason masks and PPE items haven’t been granted eligibility status yet is because they fall under this dual-purpose category. While it feels like their primary use is to prevent a disease, they have historically not been used mainly for this purpose.

Where can I go for more information?

This is a lot of detail, but we hope you find it helpful. The good news is that your HSA can be used to pay for literally thousands of qualified expenses approved by the IRS. We recommend using Lively’s up-to-date and comprehensive eligibility list to see what is and is not covered by your HSA, or might require a physician’s letter of medical necessity.

For additional HSA questions, Alliance health plan participants are welcome to contact Lively directly by emailing support@livelyme.com.

Crista Murray joined Alliance Benefits in June 2009 and has been with The Christian and Missionary Alliance for over twenty years. She is responsible for overseeing and coordinating the day-to-day execution of marketing strategies and communication efforts for both the health and retirement plans.


Posted in: Health Plan Tools