While we at The Benefits of FI see great benefit, no pun intended, in treating your health savings account (HSA) like a second retirement account and not making any withdrawals until you’re in retirement — in the case of HSAs, that’s IRS-standard retirement age. But we know that there may be occasions that arise in which you need to use your HSA funds, or where it’s simply prudent to use those funds because they’ll help you pay more in a shorter period. One such example is the birth of a new child, which is a scenario I’ve spoken about before that originally got my family into an HSA.
Also, if you’re reading this just to get information about how to best manage your money and aren’t on the FIRE path, it’s valuable to know what does and does not qualify as an HSA-eligible expense.
Long story short, there are quite a few things for which you can pay with HSA funds — things like eyeglasses and breast pumps. There are more things that may qualify under special circumstances — things like massages if prescribed by a doctor for pain relief and a wig if due to hair loss from a medical condition or treatment (chemotherapy, for example). And, of course, there are plenty of things you cannot pay for with HSA funds, such as hair removal or hair replacement. Also, uh, veterinary services. Sorry, Fido.
Here is the full list and, for more information on each, here is Publication 502 from the IRS that goes into greater detail on qualifiers and regulations for use.(more…)