There is no question raising a child can be expensive, and baby supplies are notorious for being high-priced items. New parents often struggle to find ways to make ends meet while also paying for things like diapers, baby clothes, formula, and medical appointments. All of this leads parents to question whether health savings accounts (HSAs) can be used to pay for baby supplies.
What is an HSA?
An HSA is a savings account that is typically provided as a benefit by an employer. This account allows workers to set aside tax-free money that can be used to pay for healthcare expenses for themselves or their dependents. Unused funds at the end of the year remain in the account, rolling over to the next year.
What Baby Supplies Are Eligible for HSA Funds?
When it comes to using your HSA funds for baby supplies, many items are eligible, but there are also limitations. Baby clothing, diapers, cribs, and other non-medical items are ineligible for HSA benefits usage.
You can, however, usually use HSA benefits to cover the cost of breast pumps, nursing pads, and even some formula. Medicines may also be covered, including prescription medications and some over-the-counter items. To know whether an item is eligible or not, you will want to check your account’s restrictions. If you would like to know about HSA benefits, visit this website.
What Happens If I Use My HSA for Ineligible Items?
If you try to use your HSA debit card to pay for ineligible items, the transaction may go through, but you may also be in for a big surprise in the mail. HSA transactions undergo audits, and ineligible items that slip through the cracks are going to get caught at some point.
If and when this happens, you’re going to have to pay for the item or items, and you will also likely incur a fee. This is why you are encouraged to work with your human resources department manager as well as the account manager of your HSA to ensure you understand the terms and conditions of your HSA.
Read a similar article about HSA administrator here at this page.
