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What are eligible HSA expenses?

HSA funds can be used to pay for copays, deductibles, dental and vision expenses, health care services, prescription drugs, and some over-the-counter health care items for the enrollee, their spouse, and dependents.

  • Non-prescription medicines (over the counter) do not count as qualified medical expenses for HSA purposes, with the exception of insulin.
  • For spouses and dependents, the guidelines are the same as for the employee, as long as:
    • the employee was married to the spouse at either the time the spouse received medical services or at the time of payment for medical expenses.
    • the dependent was claimed on the employee's taxes at the time medical services were provided or at the time of payment for the expenses.
  • Qualified expenses incurred before the HSA plan effective date are not eligible for reimbursement.

 Review the list of common HSA-eligible expenses in Zenefits, or see IRS Publication 502 for more information.

HSA Funds and Insurance Premiums

In general, HSA funds cannot be used to pay for health insurance premiums. However, there are exceptions:

  • Employees who elect COBRA coverage can pay for their COBRA premiums using HSA funds.
  • Employees who enroll in health insurance (not through COBRA) and are receiving unemployment compensation can pay for their insurance premiums using HSA funds.
  • Employees who are 65+ years old can use HSA Funds to pay for
    • the employee's portion of the premium of an employer-provided health insurance plan
    • Medicare premiums
  • HSA owners can pay for long-term care insurance premiums with HSA funds.
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