My son was having periodic pains in his sides, about at the bottom of his rib cage. After a few days of this occurring, it was time for a visit to the doctor. An x-ray revealed that his bowels were backed up, causing pressure on his ribs, and thus the pain. He directed us to purchase powered stool softener and suggested dosing and length of treatment to “get things moving.â€
I headed to the nearby Walmart, picking up a large container of the over the counter medication. The total on my favorite self-checkout register showed just over $20. If we followed the doctor’s directions, I would have to eventually buy another one bringing the total bill of the needed medication to $40.
Forty bucks isn’t a huge amount of money, but it was $40 I wasn’t planning on spending. In the grand scheme of things, it would be a drop in the bucket compared to the cost of the exam, lab tests, and x-ray that was done at the doctor’s office. I had a healthy amount of funds in my Health Savings Account (HSA) to cover the bill from the medical provider.
I wondered, could I use funds from my HSA to pay for the medicine my son needed?
I found my health insurance plan information and searched for expenses that are eligible to be paid using funds from an HSA. The list of qualified health related expenses is actually determined by the IRS, and not my HSA provider. This isn’t a complete list, but here are some of the most common:
- Ambulance Service
- Medication prescribed by a doctor
- Dental treatment
- Eye exam
- Eye glasses and contact lenses
- laboratory fees
- Medication prescribed by a doctor
- Surgery
- X-rays
Here are some of the most common health related expenses that are not eligible to be paid using funds from an HSA:
- Cosmetic surgery if not deemed medically necessary
- Health Club Dues
- Non prescription medication
- Personal use items
Even though my doctor suggested a course of action using medication, because the medication was not prescribed I cannot use funds from my HSA to pay for it Had I used funds from my Health Savings Account to pay for the medication, I would have to report the amount as income on my tax return, subjecting it to being taxed. . It’s always a good idea to have a working knowledge of your medical coverage, or know how to access it you need to.
Do you have a Health Savings Account? Do you know what you can use it for and what you cannot?
Brought to you courtesy of Brock
This changed a few years back, I think as part of Obamacare. The main reason is that your HSA contributions are pre-tax, so you used to be able to effectively purchase OTC items tax free. To offset some of the costs of Obamacare, this was effectively eliminated to bring back the revenue stream.
This did change as part of the ACA legislation as a way to fund it (we are working to get this reversed).
You can still get reimbursed for over the counter expenses. Ask you doctor to write you a prescription for the over the counter item (which they will gladly do when you explain why you need it). It is a pain, which is why Congress changed the rule, but you still can get reimbursed from an HSA or FSA for these types of items if you get a prescription for them.
@MoneyBeagle – I believe you’re right……forbid it that we could buy the most common medications (over the counter) with tax free money, right?
@Jim Hayes – thanks for the clarification….I wondered if that was the case. I’d like to see the look on my doctor’s face if I asked him to write a prescription for OTC drugs. 🙂
@Brock – You are welcome and it is ironic that the same legislation attempting to reduce healthcare expenses and offer coverage to more Americans eliminated the ability to buy OTC drugs tax free without visiting a doctor (increasing costs).
Yes, you will get the “why would I do that?” face from your doctor and it is worth it depending on how many OTC drugs you are purchasing in a year. If you all ever have FSA, HSA, or 401K questions for future posts feel free to email me.
@JimHayes – thanks for the offer, I might take you up on that!!!