Can you us an HSA account for cosmetic expenses?

Question

My employer offers an HSA and we dont have an HR person who can help me. I am trying to find out if i can use the money in that account to fund my invisilign braces costs. Whats the best strategy to go about the HSA account? I am still young, dont have any medical expenses and can leave the money to accumlate interest so i can use it when i'm older OR i can use the money now to fund this expensive endeavor($5800). Please advise. Thanks!

Answer 1

With any qualified HSA account the rules as to what the money can and cannot be used for is determined by the federal government - no one else. It doesn't matter who puts the money into the account, whether it be you, your employer or your next door neighbor.

Braces, along with all dental treatment except teeth whitening, are included in the list of what you can use the money for. Here are two websites from the IRS pertaining to HSA's: http://www.irs.gov/pub/irs-pdf/p502.pdf and http://www.irs.gov/pub/irs-pdf/p969.pdf

You can contribute up to $2700 for a single policy holder and up to $5450 for a family this year. So if you don't have enough money in the account for the braces and do not foresee the limit going in this year you can make a separate contribution to the account. Since you'll have to pay for the braces anyway if you contribute to the account first you'll get the tax deduction.

Answer 2

HSA's can only be used for what the IRS determines to be a qualified medical expense, while it's true you can use the money for things other than medically necessary, those services are subject to taxes and maybe even a penalty tax.

If you itemize your tax deductions your running the risk of being audited if you use the HSA for something other than section 213 of the IRS allows then you'll more than likely get burnt for it.

Cosmetic procedures along with a letter of substantiation from the servicing provider are acceptable as long as you can prove the service was done primarily to alleviate a medical condition. I'd contact your companies HSA administrator for further information.

Good Luck

Answer 3

My HSA plan will not let us use the $ in the account for services that would not normally be covered by health insurance. Its intent is to help pay our enormous deductible. However, my HSA is a bit different than most folks... My employer contributes most of the money in my fund, and I only contribute a small portion. If your contribution to the HSA is 100%, they'll probably let you use it for whatever. Call the cust svc # on the back of your card, and read your benefit book. It should tell you for sure. good luck.

Answer 4

Generally speaking, HSA's can be used for such expenses. From past experience, it appears that the decision as to whether or not it can be used is left to the person who administers the HSA.

I can only advise checking with such administrator and see what happens !

Answer 5

Most of the time, yes!!