[Last reviewed & updated: 11/11/2022]
In the US, some taxpayers have access to HSA and FSA, accounts that can help them save a significant amount on health-related expenses, including some nutritional supplements you might take to support your reproductive and prenatal health.
The average effective federal tax rate for people in the top half of the income bracket in the US is 14.5% (2019 data). The rate is higher for the top 10% of earners, at just under 20%. This means that when you use your pre-tax dollars in an HSA or FSA to purchase supplements, it's an equivalent of getting a 14-20% discount, depending on your federal income tax rate. That's a significant amount - read on to learn what you need to do to save this much on your reproductive and sexual health support.
What is HSA and FSA?
Both HSA and FSA are tax-advantaged accounts in the US that let you pay for healthcare-related products and services, using pretax dollars. These accounts reduce your taxable income, in addition to letting you save taxes on qualifying purchases.
HSA, short for health savings account, is a tax-advantaged savings account available to people who are enrolled in high-deductive insurance plan. Your contributions to HSA are not subject to federal income tax, and withdrawals are also tax-free, as long as it’s used to pay for qualifying items. The amount you have left over in an HSA rolls over.
FSA, short for flexible spending arrangements, is also a tax-advantaged account. This is an account that your employer may set up for their employees – and you can decide how much you contribute from your paycheck. The amount you have left over in an FSA at the end of the year doesn’t roll over – this is a “use it or lose it” account. Unlike HSAs, there are a few types of FSAs that can be used for other specific purposes, such as childcare, transit and so on.
What qualifies for HSA and FSA purchase?
IRS (Internal Revenue Service) sets the rules governing HSA and FSA. The general rule is that to be eligible, the expense must be related to healthcare. In general, deductibles and copays, prescription medications, dental care, orthodontia, glasses and contact lenses are eligible.
Some expenses are automatically eligible, while others require a letter from your doctor (called Letter of Medical Necessity) or a prescription. For a comprehensive list of HSA-eligible expenses, see here.
Supplements you take to support your health in general, unfortunately, don’t usually qualify. However, there are exceptions.
First, nutritional supplements that your doctor recommends as a part of your treatment for a specific medical condition are HSA-eligible (and FSA-eligible). To qualify, you’ll need a prescription or LMN. The list above also specifies what document you need in order to use HSA/FSA funds on different items.
Another exception is prenatal vitamins. Prenatal vitamins are automatically eligible under HSA and FSA, along with other pregnancy-related supplies like pregnancy tests, ovulation tests, breast pumps, etc.
How to use HSA and FSA without incurring a penalty
HSA and FSA are a great way to save on taxes when you have necessary medical expenses not covered by your health insurance. However, there is one thing you need to watch out for: Ineligible purchase will incur a 20% penalty from the IRS. When you purchase an item with your HSA/FSA that doesn’t qualify for HSA/FSA – whether by accident or because you didn’t realize it wasn’t eligible – you have to pay income tax plus a 20% penalty on the amount.
In either of these cases, here are a few things to keep in mind so you aren’t hit with a surprise penalty:
- Ask before you buy: If you are unsure whether a particular expense is eligible, don’t guess. Contact your HSA/FSA administrator and ask before you make the purchase. You don’t want that 20% penalty!
- Keep the receipt: Make sure to keep a detailed receipt to submit to your HSA/FSA administrator. This is important for reimbursement claims, but you may want to keep the receipt even for purchases made with your HSA/FSA debit card.
- Work with your doctor: You can use HSA/FSA funds for items like nutritional supplements only if you have a prescription or a Letter of Medical Necessity (LMN) from your doctor. Ask if they can provide a prescription or LMN. Let us know if you need help getting a LMN - we can help!
Do Ovaterra supplements qualify for HSA and FSA?
Ovaterra’s prenatal vitamins automatically qualifies for HSA and FSA, just like any other prenatal vitamins.
Other supplements can qualify with a LMN or a prescription from your doctor. Your HSA/FSA administrator should be able to tell you whether a supplement can be eligible – and what documentation you’ll need to submit to them.
How to use HSA/FSA to purchase Ovaterra supplements
There are a few ways to purchase Ovaterra supplements, using your HSA/FSA funds.
- If you have an HSA/FSA debit card: You should be able to use your HSA/FSA debit card like any other debit card at the Ovaterra store.
- If your HSA/FSA debit card is declined: Sometimes, HSA/FSA cards decline transactions at the Ovaterra store. This is because some HSA/FSA administrators aren’t familiar with Ovaterra, not because Ovaterra supplements are outright ineligible. If this happens to you, you can use another form of payment to place your order and submit a claim for reimbursement later.
- If you don’t have an HSA/FSA debit card: You can still use your own debit or credit card to make the purchase, then submit a claim for an HSA/FSA reimbursement like above.
Submitting an HSA/FSA reimbursement claim
To submit a reimbursement claim to your HSA/FSA administrator, in many case, you just need the order confirmation email (as well as a prescription or a LMN when necessary). Some administrators may require an itemized receipt – we are happy to provide one if that’s the case.
Get in touch with us via LiveChat if you have any questions or need help with any documentation. We are with you.
