Can I Buy CBD Oil With My Hsa Account


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Pure Craft CBD offers CBD Oil 1000mg & 2000mg flavored CBD tinctures, CBD Gummy Bears, CBD Oil for Dogs and more! Discover Pure Craft CBD PURE CRAFT BLOG Learn what you can buy with your HSA card in 2021 and 2022 and which items have changed in recent years. See how the CARES Act of 2020 impacted this list of items.

Can I Use My FSA Money To Buy CBD?

Can you use FSA money to buy CBD? Indeed, CBD is a hot topic for many people — especially those who have been diagnosed with conditions like chronic pain, arthritis, anxiety, insomnia, and more.

CBD’s legal landscape is a complex one, and the IRS has not weighed in with its own guidelines. What does this mean for FSA eligibility?

Let’s take a look at whether you can use FSA funds to purchase your CBD drops, CBD softgels, CBD gummies, CBD creams, or any other form of CBD.

Oh yeah, the scope of this post is just FSA money and just personal-use CBD. Other kinds of spending accounts — like HSAs — may qualify certain CBD purchases — like doctor-prescribed medical CBD.

What’s A Flexible Spending Account (FSA)?

First, an overview of Flexible Spending Accounts: FSAs are employer-sponsored accounts that allow employees to set aside pre-tax income to cover medical expenses.

An FSA allows you to put aside up to $2,750 a year (as of 2021) to cover the cost of things like copays, prescription drugs, and other qualified medical expenses.

This is a powerful type of account because you don’t have to pay any taxes on this money! You just tell your employer how much you want deducted from your paycheck (pre-tax) each payroll period, and it gets placed into the account for you to use later.

Pros of FSAs

There are definitely some great things about FSAs:

  • Tax-free funds
  • You can choose how much to contribute (up to $2,750)
  • No need to file extra forms during tax time
  • Covers a wide range of medical expenses

Cons of FSAs

There are also some things to consider about FSAs:

  • It’s a “use-it-or-lose-it” type of account: Meaning any leftover funds are returned to your employer at the end of the year (or grace period).
  • Mainly employee funded: Employers are less likely to contribute to an FSA (as opposed to an HSA or HRA).
  • FSA funds only cover eligible expenses.

What Products Are FSA Eligible?

We mentioned that a con of FSA funds is that they can only be used for eligible expenses.

It’s true. There is a range of qualified expenses, but it’s not always easy to figure out what your FSA will cover.

The IRS defines “medical expenses” in Section 213 of the Internal Revenue Code: “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.”(1)

Some of the most common types of expenses you might use an FSA for:

  • Doctor visits
  • Prescription drugs
  • Lab work
  • Dental services
  • Vision care
  • Diagnostic products
  • Home health items

So where does CBD fall under all this?

What’s CBD?

First a little primer on CBD.

CBD (aka cannabidiol) is a cannabinoid. It’s a plant compound that can be derived from both the marijuana and hemp strains of the cannabis plant.

It’s gained a reputation among scientists and the general population for having pain reducing, stress relieving, and wellness boosting qualities.

CBD Uses

Given its many health and wellness properties, CBD’s often used to help address symptoms common to conditions like:

  • Anxiety
  • Arthritis
  • Chronic pain
  • Epilepsy
  • Insomnia
  • Nausea

CBD isn’t an FDA-approved drug. But it’s a federally-legal, natural substance that many people are turning to for relief.

As always, though, consult with your doctor before making any changes to your treatment plan.

Different Kinds Of CBD Products Available

You can find CBD products in a variety of forms, which makes it easy to find one that works for you.

CBD can be found as:

There’s no shortage of CBD products to choose from!

Finding CBD Near You

CBD can be found across various stores, in person and online. You can find it in health and wellness shops, dispensaries, and even gas stations. Online, just search for “Best CBD Oil” and you’ll find a variety of CBD products to purchase.

Just be sure to do some research to ensure the purity and quality of the products that you purchase.

CBD Laws

CBD laws can be a little confusing, but here is some general information surrounding CBD legality.

CBD is 100% federally legal across as long as it is:

  • Derived from hemp
  • Contains no more than 0.03% THC content
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State laws may differ from federal regulation, though. Some states have more lenient laws around CBD and even cannabis. Others have more stringent statutes. Others still don’t especially articulate CBD rules and sort of just defer to the federal laws.

Visit our page Is CBD Legal in the United States? (CBD Laws)for more information.

Is CBD An FSA-Eligible Expense?

So can you buy CBD with your FSA funds?

The short answer is no.

CBD products — like CBD oil and CBD creams — are not eligible for FSA reimbursement. Right now.

The longer answer is probably not, but it’s not 100% clear. The reason is: IRS guidance dictates eligible use of funds in the FSA. And the IRS has not given any guidance around CBD yet. This leaves CBD in a bit of a gray area.

If you try to buy CBD with your FSA money, you’ll likely be asked to repay the funds.

However — seems like there’s always a “but” — laws and the cultural norms that influence them are ever-evolving. For example, in 2022 you’ll be allowed to use HSA (health savings account — one of FSA’s cousins) for CBD and hemp oil products prescribed by a doctor for a diagnosed medical condition.(2) There’s hope for FSA+CBD!

Alternative Ways To Pay For CBD

While the FSA may be a no-go today, there are other ways to pay for CBD and even save money like:

  • Subscribe and save programs
  • Paying in installments
  • Using credit cards that get you points

Check out our blogs Smartest Ways To Pay For CBD and Making CBD More Affordable for more tips on how to save the most on your CBD products.

Buying CBD With Your FSA? Probably Not…

CBD is an immensely popular product that many people use to manage their health conditions and boost their overall wellness. If you have an FSA, you may be wondering if CBD counts as one of the “medical expenses” you can use your funds for.

Unfortunately, the answer is not likely. Products like CBD oil and CBD gummies are likely not eligible for FSA, as the IRS has not set any guidelines around CBD.

Although your FSA money probably can’t be used to buy CBD products, it’s always a good idea to check in with your HR and benefits department to double check. They may have other programs to offer. And the laws and regulations may change over time.

Plus, there are many other ways to save on CBD, so be sure to check out those options, too.

HSA-Eligible Expenses in 2021 and 2022

One of the biggest financial challenges people face is covering the high costs of healthcare. Especially as you get older, your healthcare costs tend to rise much faster than inflation. Having a nest egg set aside to cover out-of-pocket health expenses is crucial.

Health savings accounts (HSAs) are designed to incentivize saving money for future healthcare needs. Congress created health savings accounts in 2003 to confer tax advantages to people who set money aside for their healthcare costs.

To contribute to an HSA, you need to have a high-deductible health plan (HDHP). That’s because HSAs are meant for those whose health insurance doesn’t cover any costs until the insured has already paid a substantial amount. Another HSA rule pertains to maximum annual contributions limits, which are set annually by the Internal Revenue Service (IRS).

Keep reading to find out exactly what types of expenses are covered by HSAs.

What is an HSA-eligible expense?

The IRS has a broad list of expenses related to medical, dental, and vision care that it considers as qualified expenses for HSAs. As long as you spend your HSA funds on any of these IRS-approved expenses, the distribution is not taxed.

Many HSA-eligible expenses are those not ordinarily covered by regular insurance. You can use your HSA to fund copayments and to pay for eligible expenses for yourself and also for your spouse and your dependents. Expenses incurred by adult dependents are eligible provided the recipient is covered by an HDHP and not otherwise insured.

Your HSA must be formally “established” before any expenses can be eligible. State law determines when your HSA is officially established. In most states, if you become eligible for an HSA on Jan. 1, but your first contribution (deducted from your paycheck) doesn’t reach your HSA administrator until Jan. 10, then your HSA isn’t considered established until Jan. 10.

List of HSA-eligible expenses

Here are some common IRS-approved HSA-eligible expenses. Note that this list is not all-inclusive. Always check with your plan provider if you have questions about whether an expense is covered.

  • Abortion
  • Acne laser treatment
  • Acupuncture
  • Ambulance fees and emergency care
  • Artificial limbs
  • Birth control pills, injections, and devices, such as IUDs
  • Blood pressure monitors
  • Body scans
  • Breast pumps and lactation supplies
  • Breast reconstruction surgery following cancer
  • Canes and walkers
  • Childbirth expenses, such as care from a midwife or obstetrician
  • Childbirth classes for the expectant mother
  • Chiropractic care
  • Contact lenses and saline solution
  • Crutches
  • Dental care, including cleanings, sealants, fluoride treatments, X-rays, fillings, braces, extractions, and dentures
  • Diabetes supplies, such as blood sugar test kits and insulin
  • Diabetes education, including nutrition counseling
  • Eye exams
  • Eye surgery, including laser surgery
  • Eyeglasses, including prescription and reading glasses, and prescription sunglasses
  • Blue-light-blocking glasses
  • First-aid kits
  • Flu shots
  • Guide dogs to assist with disabilities
  • Food, grooming, and veterinary care for guide dogs
  • Hearing aids and batteries
  • Hospital expenses for both inpatient and outpatient services
  • Infertility treatment, including in vitro fertilization; egg, sperm, and embryo storage; fertility monitors; and sperm washing
  • Egg donor expenses related to infertility treatment
  • Inpatient drug and alcohol treatment
  • Insulin
  • Lab fees
  • Long-term-care premiums, up to a qualifying amount based on your age
  • Medical alert bracelets
  • Medical records fees
  • Medicare premiums if you’re 65 or older, excluding Medicare supplemental policies
  • Night guards to treat teeth grinding
  • Nursing care, whether provided in your home or a nursing home
  • Occupational therapy
  • Oxygen and oxygen equipment
  • Physical exams
  • Physical therapy
  • Prescription medications
  • Psychiatrist care
  • Psychologist care
  • Smoking-cessation programs and drugs, including nicotine patches and gums
  • Speech therapy
  • Surgery, excluding elective cosmetic surgery
  • Thermometers
  • Tubal ligation (female sterilization) and tubal ligation reversal
  • Ultrasounds
  • Vaccines
  • Vasectomy (male sterilization) and vasectomy reversal
  • Wheelchairs
  • X-rays
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Under the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act that passed in March 2020, additional expenses became HSA-eligible. Many of these are over-the-counter (OTC) medications and products that previously were HSA-eligible only with a prescription:

  • Acid reducers
  • Acne treatment
  • Allergy and sinus medications
  • Anti-allergy medications
  • Breathing strips
  • Cough, cold, and flu medications
  • Eye drops
  • Feminine hygiene products, such as pads, tampons, and menstrual cups
  • Heartburn medications
  • Insect repellant and anti-itch creams
  • Laxatives
  • Lip treatments for cold and canker sores
  • Medicated shampoos and soaps
  • Nasal sprays
  • Pain relievers
  • Skin creams and ointments, including cleansers, toners, and moisturizers
  • Sleep aids
  • Sunscreen and OTC remedies (like aloe gel) to treat the effects of sun exposure

In addition, the CARES Act states that, through Dec. 31, 2021, telemedicine or remote healthcare can be covered by HSA plans at no charge, even if you haven’t met your insurance deductible.

HSA-eligible expenses with a diagnosis

Under the IRS rules, the following expenses may be HSA-eligible if you have a doctor’s note indicating that the product or service is necessary to treat a medical condition. Whenever you have an expense that requires a diagnosis to be HSA-eligible, be sure to obtain the necessary documentation from your medical provider.

  • Breast implant removal, if the implant is defective or causing medical problems
  • Car modification expenses for additional features, such as hand controls or a wheelchair lift, for people with disabilities
  • CBD and hemp oil
  • Cosmetic procedures, if they’re used to correct a deformity or scar stemming from an injury or disease
  • Electric toothbrushes, excluding any replacement brushes
  • Fluoride toothpaste and rinses
  • Home improvements to accommodate a medical condition, such as widening a doorway or adding a ramp to make a home wheelchair-accessible
  • Massage therapy and chairs
  • Mattresses, mattress boards, and special cushions and pillows
  • Meals and lodging, if the costs are incurred during medical treatment
  • Premiums paid for special clothing that provides relief from a diagnosed condition, excluding the “standard” cost of clothing
  • Special education or tutoring services for people with learning disabilities
  • Special home modifications for someone with an intellectual or physical disability
  • Vitamins and dietary supplements
  • Weight-loss programs, health club dues, and exercise equipment
  • Wigs, for diseases that cause hair loss

If you need an item or service that you don’t see listed here, you can find out if it’s HSA-eligible by searching the HSA Store online.KG:Adding official link for follow-up.

Ineligible expenses for HSAs

The IRS typically disallows using funds from an HSA for the following types of expenses:

  • Child care for a healthy child
  • Cosmetic procedures, unless they correct a deformity or treat an underlying medical condition
  • Employment-related physical exams
  • Funeral expenses
  • Health insurance premiums, unless you have COBRA continuation coverage or receive unemployment benefits
  • Imported medications that aren’t FDA-approved
  • Infant formula, even when the mother can’t breastfeed
  • Late payment charges and missed appointment fees
  • Life insurance premiums
  • Long-term disability premiums
  • Marijuana, even if it’s prescribed by a doctor
  • Maternity clothes
  • Toiletries

FAQ: What can I use my HSA for?

Can I use my HSA for dental expenses?

Yes. You can use your HSA to pay for dental cleanings and checkups, along with common procedures such as fillings, root canals, bridges, crowns, and orthodontics. You can’t use your HSA for common items like toothpaste, dental floss, or over-the-counter mouthwash. Cosmetic procedures, such as teeth whitening, also aren’t covered.

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Can I use my HSA for my spouse or someone else?

Yes. You can use your HSA for your spouse and anyone you claim as a dependent for tax purposes, even if they’re not covered by your high-deductible health plan.

Can I use my HSA for massage?

Sometimes. If you have a letter from your doctor stating that massage is medically necessary, then you can use your HSA to cover the cost. Your doctor must explain why it’s necessary, how frequently you need treatment, and how long the treatment should last.

Can I use my HSA for vision?

Yes. Vision costs, including eye exams and procedures, eyeglasses, contact lenses, and prescription sunglasses, are HSA-eligible expenses.

Can I use my HSA for Botox?

Typically no. HSA funds can’t be used for cosmetic procedures. Unless you’re receiving it for medical purposes — for example, to treat migraine headaches — you can’t use your HSA for Botox.

Can I use my HSA for therapy?

You can use your HSA to cover talk therapy costs if it’s to treat a medical or mental condition. Therapy that’s used for general mental well-being or stress relief doesn’t qualify. Treatment for alcohol or substance misuse is an eligible expense.

Can I use my HSA for physical therapy?

Yes. Physical therapy is an approved medical expense.

Can I use my HSA for a gym membership?

Typically no. Unless you have a letter from your doctor stating that the membership is necessary to treat an injury or underlying health condition, such as obesity, a gym membership isn’t a qualifying medical expense.

Can I use my HSA for vitamins?

Vitamins and supplements generally aren’t eligible if they’re used to maintain general health. If you have a letter from your doctor saying a vitamin or supplement is needed to treat a condition, such as a vitamin deficiency, then the expense may qualify. Prenatal vitamins are HSA-eligible expenses.

Can I use my HSA for LASIK?

Yes. You can use your HSA for laser vision-correcting surgeries, such as LASIK.

Eligible expenses for FSAs versus HSAs

Both an HSA and a flexible spending account (FSA) are tax-advantaged accounts designed to help you save money for medical expenses. The same medical expenses are eligible for coverage with HSAs and health FSAs. Other less-common types of FSAs can be used to cover dependent care or adoption-related expenses instead of medical costs.

The key difference between an HSA and a health FSA isn’t which expenses are covered, but rather who controls the money in the account. An HSA is like a 401(k) plan in the sense that you own the account’s funds. You can contribute to an FSA only if your employer offers one, and the employer owns the account. If you leave your job for any reason, you’ll usually forfeit the money in an FSA. Funds in an FSA typically cannot be rolled over from one year to the next, and you also typically can’t contribute to both an HSA and an FSA at the same time.

Related investing topics

What Is An HSA & How Does It Work?

Health savings accounts can help you pay for your medical expenses with pre-tax money.

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Is funding an HSA a good idea?

Contributing to a HSA confers tax advantages, and you can also benefit from employer contributions to an HSA on your behalf. If your employer provides health insurance through an HDHP plan but doesn’t offer an HSA, you can establish one independently through an HSA provider such as HSA Bank or Fidelity.

If you contribute to an HSA, it’s important to pay attention to which of your expenses qualify since the penalties for using HSA funds for non-qualifying expenses are steep. Ineligible distributions are considered as taxable income, and if you’re younger than 65, your HSA is charged a 20% penalty on the ineligible amount withdrawn.

HDHPs can be expensive if you have, or expect to incur, major medical bills. But if you are in good health and have an HDHP, then supplementing it with an HSA can be great way to save for future medical expenses and supplement your retirement savings.

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