Having a Health Savings Account (HSA) essentially makes all
of your qualified medical expenses tax-deductible, so read
this article carefully to make sure you aren't over paying
your taxes. Remember, there is no virtue in paying more
taxes than you really owe.
Qualified Medical Expenses
The main purpose of your HSA is to enable you to pay for
qualified medical expenses with tax-free dollars. Qualified
medical expenses are defined under Section 213 of the IRS
Code (See IRS Publication 502: Medical and Dental
Expenses). Most people remember to pay for doctor visits
and prescription drugs from their HSA (or save the receipts
and reimburse themselves later), but there are many medical
expenses that people simply pay for, without realizing that
because they own an HSA the expense is tax deductible.
These are the most common:
Over-the-counter medications. Remember, your medicine does
not necessarily have to be prescribed to be considered a
qualified medical expense. Any time you buy a bottle of
aspirin, cough syrup, bandages, or zit medicine for your
teenager - save the receipt, so you can reimburse yourself
from your HSA.
Dental expenses. Dental fees are typically the most
expensive item that people forget to pay for from their
HSA. From cleanings, to crowns, to dentures, all of your
medically necessary dental work is eligible to be paid from
your HSA.
Eye glasses and contacts. Annual eye exams along with
prescription glasses, contact lenses, and other
prescription eye glass expenses can be paid from your HSA
tax-free. Also, remember that prescription sunglasses are
considered to be a qualified medical expense.
Physical therapy. Most individual and family health
insurance plans have very limited coverage for physical
therapy. So you can pay for those expenses out of out of
your available HSA funds.
Medical massage therapy. Yes, you can use funds from your
HSA to pay for a massage, as long as your health care
practitioner recommends it as treatment for a particular
health condition.
Chiropractor visits. Remember that your HSA can be used for
medically necessary expenses. If you go to your
chiropractor due to a particular injury or functional
problem, it is a qualified expense. The chiropractor's
charges would NOT be considered eligible if you are getting
adjustments for general health maintenance.
Mental Therapy
In some circles, seeing a therapist is reason for
embarrassment, whereas in other parts of the country people
brag about seeing their therapists. The reality is that
mental therapy should be neither a symbol of shame nor a
status symbol - it is simply another mode of treatment that
can help people live healthier and happier lives.
Psychiatry, psychology, psychoanalysis, and psychotherapy -
all of these modes of treatment can be paid for from your
HSA. Keep in mind that qualified expenses are those that
pay for treatment or prevention of a medical condition. If
you are seeing a therapist strictly in order to save your
marriage or improve your business skills, these would not
be qualifying expenses.
Alternative Medicine
More and more people are disillusioned with the way
conventional medicine is practiced. The focus often seems
to be on treating symptoms rather than reaching the root
cause. Many physicians are very quick to prescribe the
latest drug, when less expensive, safer, and often more
effective natural remedies may work better.
However, the people who do rely on alternative medical
treatments rarely receive reimbursement from their health
insurance for these expenses. This is one of the reasons
that HSA plans have become so popular among people who do
favor natural and/or alternative medical treatments. Here
is just a very small sampling of the types of treatment
that would be an HSA-qualified expense:
Acupuncture. Some think the beneficial results of
acupuncture are strictly due to the placebo effect. My
veterinarian wife would tell you differently. Though she
mostly practices conventional veterinary medicine, she does
do a good bit of acupuncture on dogs and cats, and gets
some amazing results.
Homeopathy. Though controversial, approximately one out of
50 Americans currently uses homeopathy. Whether using the
services of a professional, or simply buying homeopathic
remedies from the natural food store, remember that these
expenses can be paid for from your HSA.
Traditional Chinese Medicine. Chinese medicine has been
practiced for thousands of years, and is becoming ever more
popular in the United States. Of course, treatment
modalities that originated in other countries, such as
Ayurveda (from India), would also be considered a qualified
expense.
Faith healing, shamanism, energy medicine, and other
(perhaps) far out stuff. Yep, almost any type of treatment
could be considered an eligible expense. Keep in mind that
the procedure must be related to the treatment or
prevention of a specific health condition. Services
designed to raise your chi, balance your chakras, or
strengthen your aura might be more than the IRS will allow.
Every Dollar Counts
Every medical expense you incurred counts, so don't forget
to save your receipts. If you don't, it's like paying an
extra 25% each time. Even some retailers like Target are
starting to mark on your receipts which items are health
related. That should make it even easier to get every tax
break you deserve.
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By Wiley Long - President, HSA for America (
http://www.health--savings--accounts.com ) - The nation's
leading independent health insurance firm specializing in
individual and family coverage that work with Health
Savings Accounts.
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