Qualified medical expenses include deductibles, co-pays, and co-insurance for medical and dental care.
This includes:
- Over the counter and prescription drugs
- Doctor and hospital visits.
- Telehealth visits
- Mental health services
You generally cannot use your HSA to pay your health insurance premiums because they are not considered qualified medical expenses (Plans purchased through Pennie are not qualified medical expenses). Premiums are only considered qualified medical expenses if they are for one of the following (more information can be found in IRS Publication 969):
- Long-term care insurance, subject to limits based on age that are adjusted annually;
- Health care coverage continuation, such as coverage under COBRA, including for a spouse or dependent.
- Health care coverage while receiving unemployment compensation under state or federal law. This includes for a spouse or dependent; and
- Medicare premiums for Part B, Part D, and Medicare Advantage, and other health care coverage for individuals 65 or older (not including premiums for a Medicare supplemental policy, such as Medigap).
If you are under 65 and use HSA money for things that do not count as qualified expenses, you have to pay federal income tax and a 20 percent penalty. If you are 65 or older, you still pay the tax but not the penalty.