Your Tucson accountants here at The Royce CPA Firm are committed to helping you get the most out of your Health Savings Account (HSA). Many people are confused by what they can and cannot use the funds for, especially when the rules change. However, a recent change in the rules actually works in your favor if you use an HSA.
What Has Changed
Historically, you could only use your HSA for medicines and drugs that were prescribed by a physician. The only exemption was insulin.
But now, all medicines and drugs can be reimbursed (tax-free) from your HSA without a prescription or recommendation by a physician; making over-the-counter medicines, drugs, and amounts paid for menstrual care products eligible costs for reimbursement. While the individual purchases may not be much, the amount you can be reimbursed for can add up quickly, especially if you regularly use over-the-counter medications. This expansion of eligibility beyond prescription medications can potentially save you hundreds of dollars per year.
How to Use Your HSA for Non-Prescription Medications
The next time you’re at the store and are buying over-the-counter products, consider using your HSA debit card, or submitting a reimbursement request to your HR Department for an FSA Reimbursement. Make sure you ring these purchases up in a separate transaction:
- Pain Relief (Tylenol, Advil, Midol, etc.)
- Menstrual Care Products (Tampons, Pads, Liners, Cups, etc.)
- Allergy Medicine
- Cold & Sinus Relief
This new rule only applies to reimbursements from HSAs, FSAs, and HRAs, and DOES NOT apply to itemized deductions. Those write offs must still be prescribed by a physician.
How Our Tucson CPAs Can Help With Proactive Planning
At The Royce CPA Firm, we are here to make sure you take advantage of every opportunity to maximize the benefits you can receive from using an HSA. To ensure that no detail is missed, consider signing up for either our Proactive Plan (3 meetings per year) or our Consultative Plan (9 meetings per year) to see how you can integrate these fringe benefits into your business. Contact us now for more details on our plans or about our tax and accounting services for individuals and business owners.