HSA and FSA questions, answered

Pub. 502: you can’t include the cost of nutritional supplements, vitamins, herbal supplements or "natural medicines" unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. That is a narrow exception to a prohibition — not a green light.

Reference data verdict for “Dietary supplements & vitamins” — medical care: Letter needed; card / claim desk: Letter needed; Schedule A: Letter needed.

Pub. 502: diet food and beverages are excluded because they substitute for what is normally consumed to satisfy nutritional needs. The FAQ allows only the excess cost of a special food that doesn’t meet normal nutritional needs, treats an illness, and is substantiated by a physician. No letter converts an ordinary grocery run.

Reference data verdict for “Food, groceries, protein powder, shakes” — medical care: No; card / claim desk: No; Schedule A: No.

CARES Act §3702 dropped the prescription requirement for amounts paid after Dec 31 2019 — but it amended §223, not §213(d). So these are HSA/FSA-reimbursable and still not deductible on Schedule A. Don’t let an HSA list drive a Schedule A entry.

Reference data verdict for “OTC drugs (aspirin, antacids, allergy)” — medical care: Yes; card / claim desk: Yes; Schedule A: No.

Same CARES Act change. §223(d)(2) now treats amounts paid for menstrual care products as paid for medical care.

Reference data verdict for “Menstrual care products” — medical care: Yes; card / claim desk: Yes; Schedule A: No.

Sunscreen is an FDA monograph OTC drug, so it rides the CARES Act rule — that part is IRS-based. The "SPF 15+ / broad spectrum" threshold is not in any IRS document; it comes from FDA labelling and card-substantiation coding.

Reference data verdict for “Sunscreen (SPF 15+, broad spectrum)” — medical care: Yes; card / claim desk: Yes; Schedule A: No.

The clearest case of industry convention outrunning the law. No statute, reg, notice, publication or IRS FAQ mentions glucosamine or chondroitin. Custodians code them auto-eligible anyway. Convenient, but it is convention — not authority you could cite in an audit.

Reference data verdict for “Glucosamine / chondroitin” — medical care: Letter needed; card / claim desk: Yes; Schedule A: Letter needed.

Custodians almost always auto-approve these, but no IRS document names prenatal vitamins. Under Pub. 502’s literal text they are vitamins and need a letter. Prescription prenatals are separately eligible as prescribed drugs. Label this "usually reimbursed", not "eligible".

Reference data verdict for “Prenatal vitamins” — medical care: Letter needed; card / claim desk: Yes; Schedule A: Letter needed.

Turns on the label panel, not the ingredient. A Drug Facts panel (bulk laxative, e.g. Metamucil) rides the OTC-drug rule and is reimbursable. A Supplement Facts panel (fiber gummies, "prebiotic fiber") is a supplement and needs a letter. Same psyllium, two answers.

Reference data verdict for “Fiber supplement / psyllium” — medical care: Partly; card / claim desk: Partly; Schedule A: No.

Pub. 502 excludes health club dues and amounts paid to improve general health. The FAQ leaves a needle-thin window — bought for the sole purpose of treating a specific diagnosed disease — and then says exercise for general health is "only for the improvement of general health." Custodians generally decline outright.

Reference data verdict for “Gym membership / health club dues” — medical care: No; card / claim desk: No; Schedule A: No.

No IRS authority lists exercise equipment. Custodians code it letter-required, applying the same "sole purpose / specific diagnosis" framework as gym dues.

Reference data verdict for “Fitness / exercise equipment” — medical care: Letter needed; card / claim desk: Letter needed; Schedule A: Letter needed.

Diagnostic testing is squarely §213(d) medical care. The wrinkle is bundled consumer kits: a 2019 private letter ruling split a DNA kit between its medical (genotyping, lab services) and non-medical (ancestry) components and required an allocation of the price. A private ruling binds only the taxpayer who asked for it. A plain blood panel is the easy case.

Reference data verdict for “Lab panels / biomarker testing” — medical care: Partly; card / claim desk: Yes; Schedule A: Partly.

Notice 2010-59: the OTC-drug restriction never applied to items that aren’t medicines or drugs — including "diagnostic devices such as blood sugar test kits." Eligible regardless of prescription status.

Reference data verdict for “Monitors & devices (CGM, BP cuff, glucose)” — medical care: Yes; card / claim desk: Yes; Schedule A: Yes.

The uncontroversial core of §213(d). Included here so the ledger can hold your whole year, not just the supplement part.

Reference data verdict for “Doctor visits, copays, prescriptions” — medical care: Yes; card / claim desk: Yes; Schedule A: Yes.

IRS FAQ: yes, but only if the counseling treats a specific disease diagnosed by a physician — obesity and diabetes are the IRS’s own examples. General wellness coaching is out.

Reference data verdict for “Nutritional counseling / dietitian” — medical care: Letter needed; card / claim desk: Letter needed; Schedule A: Letter needed.

No — and treating one list as the other is the most common mistake in this area. The CARES Act change that made over-the-counter drugs reimbursable amended §223, which governs health savings accounts, and not §213(d), which governs the itemised medical expense deduction. Separately, Pub. 969 requires that an expense reimbursed from an HSA must not have been taken as an itemised deduction in any year. Two different lists, two different rules.

No. A letter cannot make an ineligible expense eligible. It only documents medical necessity where the rules already leave room — protein powder stays out no matter who signs what. Submitting a letter is not approval. Your plan administrator makes the final call, and the IRS can look at it later.

No, and it never will. There is no Magellan letter service and none is planned. Only a clinician who has actually evaluated you can write a letter that means anything, because the sentence explaining how the item treats the diagnosed condition is clinical judgement about you specifically. In IR-2024-65 the IRS warned in writing about companies selling notes based merely on self-reported health information.

Not Magellan. Your plan administrator decides what your plan will reimburse, and the IRS can look at it afterwards. This site classifies expense categories against the published documents and shows you the citation; it does not and cannot adjudicate your claim.

There is no deadline at all. Notice 2004-50 Q&A-39: a distribution "can be used to pay or reimburse expenses incurred in any prior year as long as the expenses were incurred after the HSA was established. Thus, there is no time limit on when the distribution must occur." Two hard conditions: the expense must post-date the day you established the account, and it must not have been reimbursed from another source or already itemised on Schedule A.

Use-or-lose at plan-year end. Your plan may offer either a 2½-month grace period or a carryover — never both. A "run-out period" extends only the window to file a claim, not the window in which the expense may be incurred. So an FSA rewards logging as you go; an HSA forgives you for logging late.

The unextended due date of your return — April 15 following the tax year. Filing an extension does not extend it.

Pub. 969: records sufficient to show that the distributions were exclusively to pay or reimburse qualified medical expenses, that those expenses hadn’t been previously paid or reimbursed from another source, and that they hadn’t been taken as an itemised deduction in any year. Don’t send them with your return — keep them with your tax records.

There is no HSA-specific retention period anywhere in Pub. 969, Notice 2004-50 or §223 — "keep receipts forever" is practitioner advice, not an IRS rule. The only stated rule is the general one: keep records until the period of limitations for that return runs out. The advice is still sound though, and here is the actual reason: because a distribution can reimburse an expense from any earlier year, the clock runs from the return reporting the distribution, not the year of the purchase. A 2026 receipt can still be the substantiation for a 2046 withdrawal.

A non-qualified distribution is included in gross income and hit with an additional 20% tax under §223(f)(4)(A), reported on Form 8889. The 20% is waived after age 65, disability or death — but ordinary income inclusion still applies. Worth knowing if you treat the HSA as a retirement vehicle.