Can You Use an HSA for Plastic Surgery?

Yes, you can use a health savings account, or HSA, for cosmetic surgery, but only in specific circumstances as outlined by your insurance and medical requirements.  

For example, some cosmetic surgeries, like some types of dental work, can be covered by HSA funds. However, an elective aesthetic surgery that does not determine the quality of life may not fly with a medical insurance provider. 

MANY medical expenses qualify for HSA spending or reimbursement, but the line is not always so clear regarding cosmetic procedures and treatments. So, which treatments or surgeries can you use an HSA on, and are there limitations? Let’s cover all your HSA and cosmetic procedure FAQs.

What’s the Purpose of an HSA?

A health savings account (HSA) is a personal bank account with significant tax advantages that an individual can use to pay for qualified medical expenses on a compatible high-deductible health plan (HDHP).

Unlike most flexible spending accounts (FSAs), the funds in HSAs are automatically rolled over from year to year and can be used indefinitely so long as the purchase is a qualified medical expense. This is particularly attractive for younger, healthier individuals who don’t usually use the balance of their yearly contributions by the time the term resets.

Not all medical expenses are covered by an individual’s health insurance plan. But that doesn’t mean there’s no relief for out-of-pocket expenses. A health savings account is an excellent employee benefit to accompany a high-deductible health plan, and account holders should be encouraged to take advantage of these tax-free funds. For an HR professional, HSAs (and their cousin, the DFSA) are a useful way to provide cost-effective benefits for small businesses.

What’s the Purpose of an HSA?

There’s a limit to the amount that a person or family can contribute to their HSA each year, as determined by the Internal Revenue Service (IRS). Both the employer and employee may contribute to an HSA, and employees are permitted to make contributions through automatic deposits from regular payroll deductions or manual deposits.  

Individuals who make manual HSA contributions cannot take advantage of the full tax benefits until they have filed their taxes. If you offer a benefits administration platform with native payroll, like BerniePortal’s all-in-one HRIS, these contributions are made automatically. Employees can self-service contribution changes to take full advantage of HSA cost-savings. 

For updates on HSA and HDHP limits for the current year, check out this blog: IRS Announces HSA and HDHP Limits for 2025.

What Are HSA-Eligible Expenses?

An HSA-eligible expense is any expense that is medically necessary and prescribed by a physician. According to the IRS, HSA-eligible expenses—or qualified medical expenses—include:

• The costs associated with the diagnosis or cure of a disease 
• The mitigation, treatment, or prevention of disease 
• Payments for medical services rendered by physicians, surgeons, dentists, and other medical practitioners
• the costs of equipment, supplies, and diagnostic devices needed for medical purposes 
• Premiums for insurance to acquire medical care 
• Payments needed to acquire transport to seek medical services or care

The IRS specifies that HSA expenses are medical care expenses primarily used to “alleviate or prevent a physical or mental disability or illness” and do not include general health. Unfortunately, an HSA cannot be used to purchase flights to Cabo, no matter how much it improves someone’s mental state. 

The penalty for using HSA funds for ineligible expenses is the amount of the withdrawal plus income tax— with an additional 20% tax applied unless you are over 65.

For a comprehensive list of eligible expenses, see the IRS’s What Medical Expenses Are Includible? Alternatively, a list of ineligible expenses can be found in IRS’s Publication 502. These lists are detailed but may miss a few options, so be careful to double-check with your insurance provider before making financial decisions concerning your HSA. 

Can You Use an HSA for Cosmetic Surgery?

Some cosmetic surgery may meet the definition of a qualified medical expense if “it is necessary to improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.” These HSA-eligible expenses include dental implant surgery and laser eye surgery. 

Given the IRS’s definition, most cosmetic surgery does not qualify as an HSA-eligible expense—including “any procedure that is directed at improving the patient’s appearance and doesn't meaningfully promote the proper function of the body or prevent or treat illness or disease.” 

Can You Use an HSA for Plastic Surgery?

Many plastic surgeries may qualify as medical expenses, enabling you to use HSA funds. For example, breast reconstruction surgery would qualify as an HSA-eligible expense since it is a procedure designed to repair function or reduce disfiguration or dysfunction in a portion of the body. Another example is a surgical procedure completed to repair skin due to severe burns. 

While many use the terms “plastic surgery” and “cosmetic surgery” interchangeably, the American Board of Cosmetic Surgery distinguishes between the two. Cosmetic surgery is “entirely focused on enhancing a patient’s appearance,” whereas plastic surgery is “dedicated to reconstruction of facial and body defects due to birth disorders, trauma, burns, and disease.” 

Can You Use an HSA for Cosmetic Dermatology?

Yes, some dermatological needs qualify for HSA funds. For example, skin cancer and acne treatments usually do, even when insurance does not cover them. HSA funds can also be used to purchase dermatological prescriptions.

While many dermatological procedures are HSA-eligible, a Letter of Medical Necessity from the dermatologist may be necessary. 

Aesthetic issues such as wrinkles or dark spots usually do not qualify.  

Can You Use an HSA for Botox?

No, botox treatments that are not medically necessary are not HSA-eligible. However, some cases, such as migraine treatment or dental procedures, may qualify for Botox. A Letter of Medical Necessity from a doctor or dentist may be required to use HSA funds for Botox. 

Can You Use an HSA for Breast Augmentation?

No, since breast augmentation is a cosmetic procedure, it is not an HSA-eligible expense. 

However, some major insurers, such as Cigna, will reimburse the removal of defective or medically dangerous breast implants. Breast reconstruction surgery is also a qualified medical expense. 

Can You Use an HSA for LASIK Surgery?

Eye surgery is a qualified HSA expense. The IRS lists eye surgery, such as LASIK, as an HSA-eligible expense. However, aesthetic eye surgeries, rare as they may be, do not qualify. With the rise of popular and dangerous elective eye color-changing surgeries, insurance coverage remains largely nonexistent. 

Similarly, eye exams, glasses, and contact lenses qualify as medically necessary expenses. August is Eye Exam Awareness month, so be sure to use this time to check for additional discounts with your vision providers. 

Can You Use an HSA for Liposuction?

You can use an HSA for liposuction in some cases, such as weight-loss programs that include liposuction as part of the treatment plan. Some physicians use liposuction as part of a larger health plan to treat specific diseases, such as obesity, hypertension, and heart disease.  

However, the IRS notes that weight-loss programs do not qualify if “the purpose of the weight loss is the improvement of appearance, general health, or sense of well-being.”

Other obesity treatments are on the rise. For more on using Ozempic, and if health insurance providers can offer access, check out our blog: Do Employees Want Weight Loss Drugs as a Benefit? 

Can You Use an HSA for Medication or Supplies Related to an Uncovered Procedure?

Yes, if medication or supplies related to a procedure are not covered by health insurance but are deemed necessary by a doctor or dentist, then they may be HSA-eligible. 

However, if “uncovered” refers to a procedure outside the IRS’s definition of a qualified medical expense, then HSA funds may not be used for medication or supplies related to that procedure. 

You can cover your bases by getting a Letter of Medical Necessity from the doctor prescribing needs or expenses outside of coverage.

How Do You Get a Letter of Medical Necessity?

Most major HSA account administrators have their own Letter of Medical Necessity form that account holders can ask their doctor or dentist to complete. 

Some administrators may accept a letter written by a physician rather than a printable or fillable form. Still, at minimum, documentation must meet the IRS’s necessary and specific criteria.  

For more information about how benefits technology can alleviate the complexities of medical care, talk to an expert today!

Additional Resources

You can stay informed, educated, and up-to-date with employee benefits and other important topics using BerniePortal’s comprehensive resources:

• BerniePortal Blog—a one-stop-shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• HR Guides—essential pillars, covering an extensive list of comprehensive HR topics
• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics 
• Community—the HR Party of One Community forum, a place devoted to HR professionals to ask questions, learn more, and help others