What are IRS Qualified Medical HSA Expenses?

Generally, qualified medical expenses for HSA purposes are unreimbursed medical expenses that could otherwise be deducted on Schedule A (Form 1040). However, you cannot treat insurance premiums as qualified medical expenses unless the premiums are for: 

• Long-term care insurance,
• Health care continuation coverage (such as coverage under COBRA),
• Health care coverage while receiving unemployment compensation under federal or state law, or
• Medicare and other health care coverage if you were age 65 or older (other than premiums for a Medicare supplemental policy, such as Medicgap).

Click here for details on what qualifies for a Schedule A Medical Expense deduction. Keep in mind, that each expense can only be used on one form. The same expense cannot be used as a deduction on a Schedule A and for the purposes of the HSA deduction. Further explanation of  qualified medical expenses on the Schedule A may be found in Publication 502, Medical and Dental Expenses.

What expenses are included in the entry for "unreimbursed qualified medical expenses"?

In general, your entry for "unreimbursed qualified medical expenses" should only include distributions from your HSA that were used to pay or reimburse you for qualified medical expenses (see above) you incurred after the HSA was established. Do not include the distribution of an excess contribution taken out after the due date of your return, even if it was used for qualified medical expenses.

You can generally include in your entry any distributions that were used for the qualified medical expenses of:

• Yourself and your spouse
• All dependents you claim on your tax return
• Any person you could have claimed as a dependent on your return except that:
  • the person filed a joint return
  • the person had gross income of $4,400 or more, or
  • you, or your spouse if filing jointly, could be claimed as a dependent on someone else's return.
• You cannot take a deduction as an Itemized Deduction on Schedule A for any amount you include on Form 8889.

Does my non-prescription medication count as a medical expense?

Non-prescription medicines, for HSA purposes, are not considered qualified medical expenses. The drug or medicine may qualify as a medical expense for HSA purposes only, if the medicine or drug:

1. Requires a prescription.
2. Can be obtained without a prescription (such as an over-the-counter drug or medicine) but a doctor still prescribes it, OR
3. It is insulin. 

Can I use my expenses I incurred prior to establishing my HSA?

If you incur expenses before your HSA is established, they do not qualify for medical expenses. The date on which a HSA is established is determined by individual state law. Please reference Publication 969, for more information about qualified medical expenses and determining when an HSA is established.  

The following may acquire qualified medical expenses:

1. You and your spouse.
2. All dependents you claim on your tax return.
3. Any person you could have claimed as a dependent on your return except that:
   • The person filed a joint return for the current tax year,
   • The person had gross income of $4,400 or more, or
   • You, or your spouse if filing jointly, could be claimed as a dependent on someone else's return for the current tax year. 

Please Note: You are not able to deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA.