What is a qualified expense?

Find out what expenses are qualified and non-qualified.

Qualified expenses

Some expenses not covered by your health insurance plan may be covered by your spending account. The IRS calls these “qualified medical expenses.” These expenses generally help diagnose, treat or stop an injury, illness or physical defect. Take a look at some examples below of qualified expenses highlighted with a green . Items with certain conditions that need to be met have a gray .

Covered items may be different if you have an HRA, HIA+ or ExtraBucks account. Check with your employer to find out what your account covers.


Non-qualified expenses

While some expenses are qualified, others may be what the IRS calls “non-qualified medical expenses.” If you use your spending account to pay for these types of expenses, you’ll have to pay income taxes on those funds and a 20% penalty. Examples of non-qualified expenses are shown below with a red
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View a complete list of qualified and non-qualified expenses below. Or start typing below to search the list of medical expenses.

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Still not sure if it’s a qualified or non-qualified medical expense? Check out the IRS publication titled Medical and Dental Expenses; number 502. You can order a copy of it by calling 1-800-TAX-FORM (1-800-829-3676) or read it online at irs.gov/pub502. If you need tax advice, please contact a tax professional.