Wait, I Can Use My Health Savings Account to Help Pay for Genetic Testing?

Good news, science nerds. You can now use your health savings account (HSA) to pay for a portion of the popular genetic testing company 23andMe's Health + Ancestry Service. How, you ask? Let's dig in.
by Rachel Morgan Cautero August 29, 2019

DNA tests have been solving crimes and exonerating the wrongly accused for decades, and more recently the over-the-counter cheek-swab tests have provided fun cocktail party anecdotes… are you related to royalty? Do you have a rich aunt you never knew about? But mapping your DNA can unlock a host of valuable health-related information as well, like your chances of developing such conditions as type 2 diabetes, late-onset Alzheimer’s disease, or celiac disease. This is where 23andMe’s new HSA eligibility comes in. Here are the deets. 

The Basics

Thanks to a recent IRS ruling, a portion of 23andMe’s Health + Ancestry Service is now HSA or FSA-eligible. More specifically, 23andMe’s Health Predisposition, Carrier Status, and Wellness reports are considered eligible medical expenses and are therefore OK to pay for with your HSA funds. Sweet!

There is a bit of a catch, but it’s an easy one. Since 23andMe bundles the eligible portion (the health stuff) with the ineligible portion (the ancestry stuff), you will need to be sure that you’re not trying to pay for the whole test with your HSA funds. Currently, you can use HSA funds to cover $117.74 of the $199 total cost. If that amount happens to be discounted — say, they’re running a sale and offering the combined tests for $159 — that amount changes. But not to worry because 23andMe has a nifty calculator and instructions to ensure you’re paying the right amount with your eligible HSA funds.

All of this is super-easy if you purchase it through the 23andMe website. And if you are buying it at a store (23andMe’s tests are available at most national pharmacy chains), ask the cashier if you can pay a portion (the eligible amount noted below) with your HSA card and the rest with your non-HSA card and you will be set come tax time. If they happen to not be able to split payment, then just keep your receipts and do the math with 23andMe’s calculator when filing your tax return for the year.

What’s Covered

While not every feature of 23andMe is HSA-eligible, what is eligible can be incredibly beneficial to your and your family’s health Here’s what you can count on:

  • 10-plus health predisposition reports. These provide information on your predisposition to certain diseases, like type 2 diabetes, celiac disease, and late-onset Alzheimer’s disease.
  • 40-plus carrier status reports. These reports tell you if you’re a carrier for certain conditions, and more importantly if you and your partner could potentially pass along a genetic disorder to your children. But don’t freak out if you are. In most cases, both parents would have to be carriers.
  • 5-plus wellness reports. These take a look at how your specific DNA relates to muscle composition, lactose digestion, even caffeine consumption. (Yeah, might want to cut back on those four cups of coffee a day.) 

Plan Ahead

Sure, your HSA funds roll over from year-to-year and can help you build wealth down the line. But that doesn’t mean you shouldn’t use those funds to cover healthcare costs right now.

For example, if you and your partner both utilize 23andMe’s carrier status reports and find that you are carriers for a certain genetic disorder, you may decide to set aside from HSA funds for IVF, which can help you avoid passing along that disorder to your future children.

Or say you realize you’re at risk for type 2 diabetes. You may start contributing the maximum amount to your HSA if you find yourself considering how to pay for insulin, test strips, and other HSA-eligible supplies. 

And if you don’t end up with genetically predisposed disease or condition? First of all: yay! Second, this just means that you’ll have that much more in your HSA to fund your FIRE (financially independent retire early) plan… or is that just us? Plus, you may still have a great anecdote to share at your next party!

Take the first step
in taking care of you.