What healthcare expenses DO NOT qualify for reimbursement through a Personal Spending Account?

• Advance payment for future medical care
• Amounts reimbursed from any other source (i.e. other health coverage or another HSA account)
• Babysitting, childcare and nursing services for a normal, healthy baby
• Boarding School fees
• Bottled water
• Controlled substances
• Cosmetic surgery
• Dancing lessons
• Diaper service
• Electrolysis or hair removal
• Funeral expenses
• Future medical care
• Hair transplant
• Health club dues
• Household help
• Illegal operations and treatments and drugs
• Maternity clothes
• Medical Savings Account or Health Savings Account contributions
• Personal use items
• Social activities
• Swimming lessons
• Teeth whitening
• Travel for general health improvement
• Veterinary fees
• Weight loss programs for improvement of appearance, general health or sense of well-being

Important reminders:

• To help you determine whether an expense qualifies under your HSA, remember the IRS has stated that eligible expenses must be made for “medical care.” This is defined as amounts paid for the “diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body.” See the chart below for examples.
• Items that are merely beneficial to an individual’s general good health, such as vitamins or dietary supplements, are not expenses for medical care, and therefore are not reimbursable with pre-tax dollars. See the chart for examples.
• OTC drug quantities you purchase must be limited to a reasonable supply.
• Drugs must be purchased legally.
• There may be situations when your doctor recommends a treatment that will be good for your health, but still may be considered ineligible, such as a vacation.
• You are required to retain receipts from your provider, merchant or insurance carrier for 18 months to satisfy the IRS substantiation requirement.

OVER-THE-COUNTER MEDICATIONS
The IRS recently revised its guidelines regarding over-the-counter medications or drugs (OTCs) and their eligibility as a healthcare expense. Over-the-counter drugs are those items that do not require a prescription from your doctor. OTC drugs can now be reimbursed from pre-tax dollars through your Healthcare Spending Accounts. This gives you even greater tax savings than available in the past. You will be required to submit proof that substantiates the OTC expense. Documentation must include the following:

• The name of the drug or item purchased,
• The date of the purchase, and
• The amount of the purchase.

Examples of eligible OTC expenses:

• Allergy medicine
• Antacid
• Anti-diarrhea medicine & laxatives
• Band-Aids, bandages & gauze pads
• Calamine lotion & bug bite medication
• Carpal tunnel wrist support
• Cold & flu medicine
• Cold/hot packs for injuries
• Condoms & spermicidal foam
• Contact lens cleaning and wetting solution
• Cough drops & throat lozenges
• First aid cream & antibacterial ointment
• First aid kits
• Incontinence supplies
• Liquid adhesive for cuts
• Menstrual cycle products for pain & cramp relief
• Motion sickness pills
• Muscle or joint pain reliever
• Nasal strips
• Nicotine gum or patches for smoking cessation
• Ointment or cream for sunburn
• Pain reliever
• Pedialyte
• Pregnancy test kit
• Reading glasses
• Sinus medication & nasal sinus sprays
• Sleep aids
• Suppositories and creams for hemorrhoids
• Thermometer
• Wart remover treatment

Examples of OTC expenses requiring a medical doctor’s note:

• Arthritis treatment
• Chinese herbs, naturopathic, & dietary supplements
• Depression medication
• Hormone therapy
• Lactose intolerant pills
• Nasal spray for snoring
• Orthopedic shoes and inserts (price difference only)
• Sleeping aids
• Sunscreen
• Topical creams
• Vitamins (to treat a medical condition)
• Weight loss drugs

Examples of ineligible OTC expenses:

• Cosmetics
• Deodorant
• Face cream, suntan lotion, & moisturizers
• Medicated shampoo & soap
• Mouthwash
• Multivitamins
• Sleeping pills
• Tissues
• Toiletries
• Toothbrush
• Toothpaste
• Vaseline
• Weight scales
• Vacation or travel for reasons other than receiving medical services

Getting reimbursed for healthcare expenses:

Accessing funds with the Blue Healthcare Bank debit card

• As an alternative to claim forms and reimbursements, Blue Healthcare Bank offers you another simple and convenient way to access your funds. The Blue Healthcare Bank debit card can be used to pay for services at the point of sale. These Point of Sale transactions will automatically deduct from your account. In cases where you receive a bill for medical expenses, you can simply write your Blue Healthcare Bank debit card number on the bill and send it back to the provider as payment.