Can I Use My HSA Card at Any Pharmacy?

Health Savings Accounts (HSAs) are a great way to save money on healthcare expenses. With an HSA, you can make tax-free contributions and use the funds to pay for qualified medical expenses tax-free. This includes prescriptions and other items purchased at pharmacies. But can you use your HSA card at just any pharmacy?

The short answer is yes, you can use your HSA debit card at virtually any pharmacy in the U.S. to purchase eligible medications and other healthcare products. However, there are some important things to know about using your HSA card at pharmacies.

Overview of HSAs

First, let’s review some key facts about Health Savings Accounts:

• HSAs are special accounts that allow you to set aside pre-tax or tax-deductible funds to pay for qualified medical expenses.

• To be eligible for an HSA, you must have a High Deductible Health Plan (HDHP).

• Contributions to an HSA can be made by you, your employer, or anyone else on your behalf.

• Contribution limits for HSAs are set by the IRS each year. For 2023, the limits are $3,850 for individual coverage and $7,750 for family coverage.

• HSA funds roll over from year to year if you don’t spend them. There’s no “use it or lose it” penalty.

• You can invest your HSA funds for potential added growth.

• At age 65, you can withdraw HSA funds for any purpose without penalty, but will have to pay income tax on non-medical withdrawals.

Using Your HSA Card at Pharmacies

HSA debit cards, sometimes called HSA Visa cards, allow you to access your HSA funds to pay for eligible medical purchases. This includes prescriptions and other health-related items at pharmacies such as:

• Prescription drugs
• Over-the-counter (OTC) medications
• Contact lens solution
• Bandages
• Sunscreen
• Menstrual care products
• Condoms
• Pregnancy tests
• And more

You simply swipe your HSA card at the pharmacy counter just like you would any other debit or credit card. The amount of your purchase is automatically deducted from your HSA balance.

One benefit of using your HSA card over other payment methods is that your purchase records can make expense tracking easier at tax time. Your HSA provider likely makes it easy to access your account activity online or via mobile app.

HSA Card Use at Major Pharmacy Chains

The major pharmacy chains in the U.S. all accept HSA cards, including:

• CVS
• Walgreens
• Rite Aid
• Walmart
• Costco
• Kroger
• Albertsons
• Publix
• HEB
• And more

So no matter what pharmacy you prefer to use, you should have no problem using your HSA debit card there. The transaction process is quick and seamless.

Some things to keep in mind when using your HSA card at these major chains:

• CVS: You can use your HSA card for pharmacy and front store purchases. If you have a CVS ExtraCare card, make sure to link it to your HSA card so your HSA purchases earn rewards.

• Walgreens: Walgreens accepts HSA cards with no issues. You can also link your Balance Rewards membership for earnings on HSA purchases.

• Rite Aid: Rite Aid welcomes HSA cards. You can connect your Wellness+ Rewards card to your HSA card to accumulate points.

• Walmart: At Walmart pharmacies and stores, HSA cards are accepted. You can link your Walmart rewards account for savings.

• Costco: Costco pharmacy and warehouses accept HSA cards. If you have an Executive membership, your HSA purchases will earn 2% rewards.

Daily Purchase Limits on HSA Cards

Most HSA providers place daily debit card limits on your account as a fraud prevention measure. These limits prevent excessive HSA spending in one day that could be suspicious or indicate fraudulent use.

The exact daily purchase limits depend on your HSA provider. But common amounts are:

• $3,000 to $5,000 per day at healthcare merchants like doctor’s offices, hospitals, and pharmacies

• $2,000 to $3,000 per day at retailers like grocery stores and big box stores

This should accommodate most legitimate HSA spending at pharmacies in one day. But if you ever need to make an exceptionally large pharmacy purchase that exceeds your card’s single transaction limit, you have options:

• Pay out of pocket and reimburse yourself later. There is generally no limit on HSA reimbursements to yourself.

• Divide payment over multiple days. You can work with the pharmacy to split payment across several days.

• Use checks. If available, you can write an HSA check to the pharmacy for the amount due.

• Arrange bill pay. Your HSA provider may allow you to pay a pharmacy bill online directly from your HSA funds.

HSA Card Tips for Pharmacies

To ensure a smooth experience using your HSA card at the pharmacy, keep these tips in mind:

• Know your daily limits. Track your spending to avoid exceeding your card’s daily limit. Plan ahead for big purchases.

• Save itemized receipts. While usually not needed for HSA expense verification, receipts help with tracking.

• Link to loyalty programs. Sign up for pharmacy rewards programs and link to your HSA card.

• Watch for denied transactions. Occasionally non-eligible items may be denied payment by your HSA provider.

• Ask about discounts. Inquire with the pharmacist about lower cash prices or coupons for prescriptions. Using HSA funds for discounted meds saves your account balance.

• Use generics when possible. Filling prescriptions with generic versions can yield substantial savings with your HSA. Discuss options with your doctor.

• Check your balances. Log into your HSA account frequently to see your contributions, expenditures, and available balance.

Purchasing OTC Medications With an HSA Card

Thanks to the CARES Act, you can now use your HSA card to purchase over-the-counter (OTC) medications at pharmacies without a prescription. However, it’s important to note that not all OTC items are HSA-eligible.

Some examples of OTC medications you can purchase with HSA funds include:

• Pain relievers: Tylenol, Advil, aspirin
• Cold/flu medicine: decongestants, cough syrups, nasal sprays
• Allergy relief: antihistamines, nasal saline spray
• Upset stomach aids: Pepto-Bismol, acid reducers
• Laxatives and anti-diarrheal medicine
• OTC hormone therapies
• Medicated skin treatments: acne solutions, wart removers

But OTC items that are generally not HSA-eligible include:

• Vitamins and supplements
• Menstrual products
• Probiotics
• Teeth whitening products
• Nasal strips
• Motion sickness relief
• Herbal or homeopathic remedies

You can pay for non-eligible OTCs with your HSA card. But you may have to reimburse your HSA for those purchases later to avoid taxes and penalties.

Using HSA Funds for Pet Medications

Can you use your HSA card to purchase pet medications from the pharmacy? Unfortunately, pet meds are not eligible HSA expenses, even if prescribed by a veterinarian.

However, you may be able to use your HSA for your own prescription if it is written by your physician for a medical purpose that happens to also benefit your pet. For example, if your pet has fleas and your doctor prescribes you an oral flea medication for a skin condition, that may be HSA-eligible.

But you cannot use your HSA for pet-only medications prescribed by a vet for your pet’s sole benefit. You would need to pay for pet prescriptions out-of-pocket or with another payment method.

HSA Card Eligibility If No Longer HDHP-Covered

If you are no longer covered by a qualifying HDHP, you cannot continue contributing funds to your HSA. However, you can still spend your remaining HSA balance on eligible medical purchases like pharmacy items.

So even if you switch health insurance plans and can’t put more money into your HSA, existing funds remain available for you to use tax-free on qualified expenses. Just be sure to use your HSA card only for eligible purchases, and reimburse ineligible ones to avoid tax headaches.

Avoiding HSA Card Declines or Reversals

To prevent your HSA card from being declined at the pharmacy checkout, follow these tips:

• Verify your HSA balance beforehand to ensure you have enough funds.

• Stick to eligible OTC purchases only. Avoid vitamins, supplements, and similar products.

• If the pharmacy merchant category is mis