4
Expanding the Definition of "Medical" to Maximize Your Bucket 10:14 Blythe: Okay, Miles, let’s get into the nitty-gritty of what I can actually put in my "shoebox." If I can count things like sunscreen or aspirin, my "tax-free reimbursement bucket" is going to fill up way faster than if I only count major surgeries.
0:43 Miles: Exactly. Most people leave money on the table because they only think about the big stuff. But since 2020, the definition of "qualified medical expenses" has been massively expanded. You don't even need a prescription for over-the-counter meds anymore. Think about your last trip to the drugstore: cold medicine, allergy pills, antacids, even those expensive boxes of bandages—those all count.
10:50 Blythe: Wait, so every time I buy a bottle of ibuprofen or some allergy spray, I should be saving those receipts?
10:56 Miles: Absolutely. And don't forget menstrual products. That was a huge addition. Pads, tampons, cups—they are all HSA-qualified now. If you’re buying these things out of pocket and saving the receipts, you’re basically creating a tax-free savings account for yourself. Even sunscreen—as long as it’s SPF 15 or higher—is considered a qualified medical expense.
11:16 Blythe: Sunscreen? My summer beach trips just became a tax strategy. That’s amazing. What about more specialized stuff? I’ve heard vision and dental are included too.
11:28 Miles: Oh, heavily. It’s not just your annual cleaning. We’re talking fillings, crowns, braces—even Invisalign. And for vision, it’s everything from the eye exam to the frames, lenses, and contact lens solution. Even non-prescription reading glasses count. If you’re paying for a $500 pair of designer frames out of pocket, that’s $500 you can pull out of your HSA tax-free ten years from now.
11:52 Blythe: What about things like therapy or mental health? I feel like that’s a major expense for a lot of people these days.
11:58 Miles: It’s fully covered. Psychiatrists, psychologists, and even licensed counselors are all qualified. And if you’re struggling with something like smoking or a specific diagnosed condition like obesity, treatments for those—including smoking cessation programs or weight-loss programs prescribed by a doctor—are also qualified.
12:16 Blythe: Now, I’ve heard there’s a bit of a gray area with things like "wellness" or supplements. If my doctor tells me to take a multivitamin, can I use my HSA?
12:26 Miles: That’s where you have to be careful. The IRS is pretty strict about "general health." A daily multivitamin just for wellness usually doesn't count. However, if a doctor diagnoses you with a specific deficiency—like a Vitamin D deficiency—and writes a "Letter of Medical Necessity," then it counts. The same goes for things like gym memberships. Generally, the answer is no. But if it’s prescribed to treat a specific diagnosed condition like hypertension or diabetes, and you have that letter of medical necessity, it might pass.
12:58 Blythe: So the "Letter of Medical Necessity" is the golden ticket for those edge cases. But what about travel? You mentioned that earlier. If I have to drive to a specialist in another city, does that count?
13:09 Miles: It does. And this is one of the most overlooked categories. You can count the IRS standard mileage rate for medical travel—which is 22 cents per mile for 2026—plus parking and tolls. If you have to stay overnight for medical care, you can even count up to $50 per night for lodging. It’s not a five-star hotel, but it adds up.
13:28 Blythe: This is really changing how I look at my drugstore trips. But I have to ask about the "forbidden" list. What are the big mistakes people make? What’s the "magazine and candy bar" of the HSA world?
13:41 Miles: The big ones are cosmetic procedures. Teeth whitening? Not qualified. Face-lifts or elective liposuction? Nope. Unless it’s reconstructive surgery after an accident or to treat a deformity, the IRS isn't going to let it slide. Also, toiletries—toothpaste, deodorant, shaving cream—those are general hygiene, not medical. If you swipe your HSA card for a haul at the pharmacy and it includes shampoo and a birthday card, you’re technically making a non-qualified withdrawal for those items.
14:11 Blythe: Which brings us back to why paying out of pocket is safer. If I pay with my regular credit card, I don't have to worry about "splitting" the transaction at the register. I just scan the whole receipt and then, when I’m doing my "librarian" work later, I only add the qualified items to my spreadsheet.
0:43 Miles: Exactly. It prevents "accidental" non-qualified withdrawals. And it keeps your money in the account where it belongs—growing. But there’s one more category that’s really complex but incredibly valuable: insurance premiums. Most people think you can’t use an HSA for premiums, and they’re mostly right, but there are four huge exceptions.
14:46 Blythe: I’ve heard about these. COBRA is one, right?
4:02 Miles: Yep. If you lose your job and take COBRA, you can pay those premiums with tax-free HSA dollars. Same if you’re receiving unemployment compensation—you can pay for health insurance premiums during that time. Then there’s long-term care insurance, up to certain age-based limits. And finally, the big one for retirement: Medicare premiums.