Are Over-the-Counter (OTC) Items Eligible for HSA? | HSA Awareness

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OTC eligibility under CARES Act changes

Are you wondering if Over-the-Counter (OTC) items are eligible for Health Savings Account (HSA) expenses? Let's dive into this commonly asked question and gain a better understanding of what you can use your HSA funds for.

When it comes to OTC items, the answer is both yes and no. The recent changes brought by the CARES Act in 2020 have expanded the list of eligible items for HSA reimbursement, allowing some OTC products to be considered as qualifying medical expenses.

Here are some key points to consider:

Eligible and non-eligible OTC examples

• With the CARES Act, menstrual care products like tampons and pads are now eligible for HSA reimbursement.
• Common OTC items such as pain relievers, cold medicine, bandages, and other medical supplies are also considered eligible expenses.
• However, vitamins and supplements that are not prescribed by a healthcare provider are typically not HSA eligible.

Recordkeeping and guidance for OTC purchases

It's important to keep receipts and documentation for any OTC items you purchase with your HSA funds in case of an audit. Remember to always check with your HSA provider or tax advisor for specific guidance on eligible expenses.

Many people often ask if they can use their Health Savings Account (HSA) funds to purchase Over-the-Counter (OTC) items. Thankfully, the CARES Act of 2020 made significant changes to the landscape of HSA-eligible purchases, making it easier to manage your health expenditures.