Can I Use My HSA for Non-Traditional Medical Expenses?

Offsetting some of the costs of medical expenses by using a health savings account (HSA) is really quite easy. You’ve just got to know how to do it…

Let’s be real: Western medicine is miraculous. It’s cured what was previously thought incurable, and just generally raised the quality of life for billions.

But it doesn’t have the answers for every ailment.

From chronic pain to anxiety, non-traditional options offer paths to healing that aren’t readily accessible in your standard doctor’s office. Plus, most insurance has strict limits on what’s covered, and accepted treatments don’t usually stray too far from the mainstream.

So if you’re on your own path to wellness (or just considering giving it a go) and wondering how you might offset some of the costs around your medical expenses by using a health savings account (HSA), keep reading.

Take Care of Yourself, Tax-Free

Health savings accounts (HSAs) are a great way to take care of yourself tax-free. You contribute directly from your paycheck, so you’re avoiding paying 20%+ income taxes on;  that money, so you can grow it (tax-free in savings and/or investment funds and then you can spend those funds tax-free on eligible medical expenses.

What’s Actually Covered?

The rules around what you’re allowed to spend your HSA on are nuanced, sure, but boil down to a simple, three-part question. Here goes:

Is the treatment in question recommended by a doctor? Is it treating a specific ailment? And is it medically necessary?

If the answer is yes, yes, and yes, the treatment in question is probably covered by your HSA (for the full IRS guidelines on what’s reimbursable, read more here).

A few common examples that break down this idea of “medical necessity” are as follows:

  • Massage: You like to get a massage once a month to relax (we totally get that). Unfortunately, this is not covered, as treatments covered by your HSA must be medically necessary.
    • However, if you have chronic pain and your doctor recommends this as treatment and provides a letter documenting the medical necessity, you’re covered!
  • Acupuncture: Covered! But keep in mind, this should be covering an acute ailment, not regular relaxation. Best to request a letter of recommendation from your doctor.
  • Chiropractor: Largely covered without any letter/documentation, though it’s always a best practice to get documentation.
  • Not covered: Over the counter medicines, essential oils, fitness classes. But check out the IRS doc above for a comprehensive list.

Have you noticed a trend here? Getting and saving documentation of medical necessity is important.

Ok, I’ve got my first appointment…

So you’re going to a covered appointment and wondering how you pay for the appointment with your HSA? Easy.

Option 1: pull out your Starship HSA debit card, swipe, and get to healin’.

Option 2: keep a receipt from your appointment, open your Starship app, click the big plus, and follow the prompts to arrange for quick and easy reimbursement.

It’s really that simple. But do note that if you do accidentally use your HSA for something that turns out to be a non-medical expense, you’ll have to pay income taxes and an additional 20% penalty on whatever amount you spent from your HSA.

To avoid being penalized for alternative treatments, we recommend that you fully review the IRS list of approved HSA expenses, and (again) always ensure you get (and save!) documentation of the medical necessity from your doctor.