Understanding exactly what you can (and cannot) pay for with a Health Savings Account (HSA) or Flexible Spending Account (FSA) is one of the most common questions employees ask during benefits enrollment-and rightly so. These accounts can save you hundreds or even thousands of dollars in out-of-pocket healthcare costs, but only if you use them correctly. The IRS defines eligible medical expenses under Section 213(d) of the Internal Revenue Code, and both HSAs and FSAs generally follow these same rules, with a few key exceptions.
The short answer is that you can use HSA or FSA funds for most medical, dental, and vision care expenses that are primarily intended to diagnose, cure, mitigate, treat, or prevent disease. But the details matter-and so does knowing how these accounts interact with a program like WellthCare, which rewards preventive care and can preserve your HSA/FSA dollars for the expenses that truly need them.
Eligible Medical Expenses You Can Pay With an HSA or FSA
These are the most common qualifying expenses. The IRS updates this list regularly, so always verify eligibility in your plan year.
Doctor Visits and Hospital Care
- Primary care, specialist, and urgent care copays and coinsurance
- Hospital inpatient and outpatient services
- Surgery and anesthesia
- Emergency room visits
- Preventive care (screenings, annual physicals, immunizations) - though note that under WellthCare, these may be available at $0 co-pay, preserving your HSA/FSA for other needs
Prescription Drugs and Medications
- Prescription medications (including insulin and many specialty drugs)
- Over-the-counter (OTC) medicines with a prescription (since 2020, OTC items like pain relievers, allergy meds, and cold remedies are FSA/HSA-eligible without a prescription thanks to the CARES Act)
- Premium-brand and generic drugs prescribed by a provider
Dental and Vision Care
- Dental exams, cleanings, fillings, crowns, bridges, and dentures
- Orthodontia (braces and retainers)
- Eye exams, eyeglasses, contact lenses, and contact lens solution
- LASIK and other corrective vision surgery
Mental Health and Substance Use Treatment
- Psychotherapy, counseling, and psychiatric visits
- Inpatient mental health treatment
- Substance use disorder treatment programs
- Prescription medications for mental health conditions
Medical Equipment and Supplies
- Crutches, wheelchairs, walkers, and canes
- Blood pressure monitors, glucose monitors (and test strips)
- CPAP machines and supplies
- Thermometers, first-aid kits, and bandages
- Hearing aids and batteries
Diagnostic and Preventive Services
- Lab tests, X-rays, MRIs, and CT scans
- Mammograms, colonoscopies, and Pap smears
- Genetic testing when medically ordered
- Smoking cessation programs and nicotine patches/gum
- Weight-loss programs for diagnosed medical conditions (not general fitness)
What Is Not Eligible Under Most HSA/FSA Plans
While the list of eligible expenses is broad, there are important exclusions. Using funds for ineligible items can result in taxes and penalties.
- Health insurance premiums - You generally cannot use HSA/FSA funds to pay for your health insurance premiums (with a few narrow exceptions, like COBRA continuation coverage or Medicare Part B/D premiums for HSA holders)
- Cosmetic procedures - Teeth whitening, cosmetic surgery, liposuction, and similar services (unless medically necessary to treat a deformity or injury)
- Dietary supplements - Vitamins, herbs, and nutritional supplements (unless prescribed for a specific medical condition)
- Fitness programs and gym memberships - Even if recommended by your doctor, these are generally not eligible unless part of a structured, medically supervised weight-loss program
- General health items - Toothbrushes, toothpaste, cosmetic contact lenses, and most non-medical toiletries
Key Differences Between HSA and FSA Rules
Though the eligible expense lists are nearly identical, there are critical operational differences every employee should know:
- Fund ownership: HSA funds roll over year after year and are yours to keep, even if you change jobs. FSA funds are typically “use-it-or-lose-it” (though many plans offer a $610 carryover or a 2.5-month grace period).
- Qualifying for an HSA: You must be enrolled in a High-Deductible Health Plan (HDHP) to contribute. There is no such requirement for a Healthcare FSA.
- Coordination with WellthCare: Because WellthCare provides $0 co-pay preventive care and instant Store rewards before you ever touch your HSA or FSA, your pre-tax dollars stretch further-covering deductibles, prescriptions, and other out-of-pocket costs instead of being used for everyday care.
How WellthCare Helps You Maximize Your HSA and FSA
One of the smartest employee strategies is to use WellthCare first. Here’s how the ecosystem works alongside your HSA/FSA:
- Free preventive care from WellthCare - Annual checkups, lab work, and preventive screenings cost $0, preserving your HSA/FSA for true out-of-pocket needs.
- Earned store rewards - For completing preventive actions, you receive real, spendable dollars at the WellthCare Store, which can be used on FSA-eligible items like OTC meds, supplements, and home health supplies without touching your account.
- Automatic pension contributions - Healthy behaviors automatically build retirement wealth, reducing the long-term financial strain that often forces people to dip into HSAs prematurely.
- Bill reduction services - WellthCare’s built-in bill reduction tool can lower out-of-pocket medical bills by an average of 70%, meaning you’ll need less HSA/FSA money to cover them.
The result? Your HSA or FSA becomes a dedicated fund for unexpected medical costs, deductibles, and high-value prescriptions-rather than being drained by routine care.
Practical Tips for Managing Your HSA or FSA
- Keep receipts and documentation - Even though you don’t need pre-approval, retain itemized receipts for any expense over $50 in case of IRS audit.
- Use a debit card or pay out-of-pocket and reimburse later - HSA and FSA debit cards are convenient, but some people prefer to pay with a credit card for rewards, then reimburse themselves tax-free from the account.
- Plan ahead for the use-it-or-lose-it rule - If you have an FSA, schedule dental cleanings, eye exams, or buy eligible supplies before year-end. WellthCare’s Store can also help you use leftover FSA dollars on real health products.
- Don’t forget dependents - You can use HSA/FSA funds for eligible expenses incurred by your spouse and tax dependents, even if they aren’t covered by your health plan.
Final Word
HSAs and FSAs are powerful tools, but they work best when paired with a system that reduces your overall out-of-pocket burden first. By using WellthCare’s $0 co-pay preventive care and earned rewards, you can reserve your pre-tax dollars for the expenses that truly need them-and simultaneously build your retirement wealth. The result: healthier employees, smarter spending, and far less financial stress.