1st Source Bank

Qualified Medical Expenses

Money from your HSA Checking account can be used to pay only for Qualified Medical Expenses.

Just what are Qualified Medical Expenses? 

Qualified Medical Expenses are defined by Federal Employees Health Benefits law and Section 213 of the IRS Code. For details and guidance, please refer to IRS Publication 502 or consult your tax advisor.

Here is a short sampling of currently accepted Qualified Medical Expenses:

  • ambulance service
  • dental treatments
  • diagnostic services
  • doctors’ visits
  • eye exams and eyeglasses
  • hearing aids
  • hospital services
  • laboratory fees
  • nursing services
  • prescription drugs
  • smoking cessation programs
  • surgical fees
  • therapy services
  • vision correction surgery
  • wheelchairs and crutches
  • X-rays and scans

Money withdrawn for unqualified expenses is taxable as income. If withdrawn before age 65, it is subject to an additional 20% tax penalty.

We therefore recommend that you document every HSA Checking transaction by retaining your receipts. If you have any doubt about whether an expense qualifies or not, be sure to consult your tax advisor.

I’d like more information on HSA Checking and Qualified Medical Expenses.