Can You Use an HSA to Pay for Cosmetic Surgery?

If cosmetic surgery has crossed your mind, you're in good company. Many people pursue these procedures to enhance their appearance or achieve better symmetry. But with costs in the thousands of dollars, cosmetic procedures aren’t exactly easy on the wallet.  

If you're hoping to use a tax-advantaged account like a health savings account (HSA) to offset the costs of cosmetic surgery, it’s not that simple. Cosmetic procedures done purely to change or improve appearance aren’t HSA eligible. However, those needed to treat a medical condition might qualify.

Is it possible to use HSA funds for cosmetic surgery?

No, you generally can’t use an HSA for cosmetic surgery and get the tax benefits. The IRS defines cosmetic surgeries as procedures that improve appearance without enhancing how the body functions or helping prevent or treat a health condition. Because they’re not medically necessary, these procedures aren't considered qualified medical expenses for HSA purposes.

Here are common types of cosmetic surgery that are typically not HSA eligible: 

• Rhinoplasty (nose job)

• Neck lift or facelift

• Eyelid surgery

• Cheek or chin enhancement

• Breast reduction, augmentation, or lift

• Abdominoplasty (tummy tuck)

• Liposuction

• Gynecomastia surgery (male breast reduction)

• Laser procedures

• Botox 

• Dermal fillers

While you can’t use an HSA to pay for most cosmetic surgeries tax-free, there are a few exceptions.

When are cosmetic surgeries HSA-eligible expenses?

Some cosmetic surgeries may be considered medically necessary if they serve a health-related purpose. If so, they may meet the criteria for qualified medical expenses.

According to the IRS, a cosmetic procedure may qualify as HSA eligible if it addresses a deformity resulting from:

• A congenital abnormality, or a condition present at birth

• An injury or trauma caused by an accident

• A disfiguring disease that affects appearance or function

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• Qualified medical expenses: You might be surprised to learn that you can use your health savings account (HSA) to pay for these qualified medical expenses.

• How much does a facelift cost? Before scheduling your facial rejuvenation procedure, it helps to understand what affects the total price.

• You can't contribute to an HSA after joining Medicare. Find out how you can use your HSA funds during retirement.

Let’s look at some examples of when cosmetic surgeries might be HSA eligible.

Breast reduction surgery can be considered either cosmetic or medically necessary, depending on the circumstances. If a procedure is done primarily for appearance purposes or to help clothes fit better, it's not HSA eligible. However, a breast reduction that addresses a medical issue related to having large breasts, like chronic neck and back pain or posture problems, may qualify. But you would need documentation from your healthcare professional stating that the surgery serves a medical purpose.

Another example is blepharoplasty (eyelid surgery). This procedure fixes drooping eyelids by removing excess skin, muscle, or fat. While many people get this procedure to look younger, it may be HSA eligible if it addresses drooping eyelids that affect vision. Proving that the procedure is medically necessary usually requires visual field testing and a letter from the surgeon verifying that the surgery is primarily to improve eyesight, not appearance. 

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Can you use HSA funds to pay for Botox?

If you're using Botox for cosmetic purposes like reducing wrinkles or fine lines, it’s not considered an HSA-eligible expense. 

However, Botox may be HSA eligible if it's used to treat a medical condition like chronic migraines, severe muscle spasms, or overactive bladder. But you'll need documentation from your healthcare professional showing that the Botox is for a medical condition rather than cosmetic purposes.

How can you get cosmetic surgery approved as an HSA-eligible expense?

While you don't need preapproval to use your HSA funds, it's important to maintain proper documentation in case of an IRS audit. 

If you’re planning to pay for a cosmetic procedure with HSA funds and you believe it serves a medical purpose, follow these five steps to document it as a qualified medical expense.

1. Consult with a healthcare professional 

Start by scheduling an appointment with a healthcare professional. They will assess your condition and determine if the procedure is medically necessary. 

2. Verify if your procedure qualifies

Make sure the procedure meets the IRS’ criteria for medical necessity before paying for it with your HSA funds. You can also call your HSA plan administrator to ask about eligibility and the documentation you should maintain.

3. Get a letter of medical necessity 

For a procedure that could be considered cosmetic, it’s a good idea to obtain a letter of medical necessity (LOMN). An LOMN is a formal document from your healthcare professional explaining why the procedure is essential for treating your condition. It should include the following details:

• Your diagnosis 

• How the condition affects your health or ability to function on a daily basis

• Why the procedure is necessary to treat your health condition

• Expected medical benefits from the procedure

• Length of treatment, if applicable

4. Gather other supporting medical documents

In addition to the LOMN, it's helpful to collect other medical records that support your argument. Some possible examples are:

• Diagnostic test results 

• Photos documenting the condition, if applicable

• Records of previous treatments

• Documentation of any related health complications

5. Keep all of the documentation on hand

The IRS can audit your HSA spending, and if they do, you’ll need to show that the procedure was a qualified medical expense. Hold onto the following documents for at least 3 years:

• The LOMN 

• Any supporting medical records 

• Medical bills and receipts showing the payment details

What are the downsides of using an HSA to pay for cosmetic surgery?

If you use your HSA to pay for nonqualified expenses and you're under age 65, you may have to pay a 20% penalty in addition to income taxes. For example, if you were to spend $1,000 on Botox injections for cosmetic reasons, you'd likely owe a $200 penalty (i.e., 20% of $1,000). And if you're in the 20% tax bracket, you'd also owe $200 in income tax. This means your $1,000 cosmetic procedure could actually cost you $1,400 after penalties and taxes.

Once you reach age 65, the rules change. At that point, you can use your HSA funds for any expenses, including nonmedical ones, without paying the 20% penalty. However, you'll still have to pay regular income tax on any withdrawals used for nonqualified medical expenses.

What are the best alternatives to using HSA funds for cosmetic surgery?

Several financing options are available to help cover cosmetic surgery costs, including:

• Medical credit cards: Medical credit cards from companies like CareCredit are designed specifically for healthcare expenses. They often feature promotional 0% interest rates if you pay charges in full within a certain period. Just be aware that if you don't pay your balance by the end of the promotion, you may be charged interest on the entire original amount.

• Personal loans: Borrowing through banks and credit unions means fixed interest rates and predictable monthly payments. While personal loans typically have higher interest rates than mortgages or car loans, they may offer lower rates than credit cards.

• Provider payment plans: The healthcare professional who performs your cosmetic procedure may offer in-house financing or partner with third-party companies to let you split the cost into monthly installments. Just be sure to ask about interest rates and monitor the charges.

• Cash payment discounts: If you have the funds available, ask about discounts for paying the full amount upfront. Paying upfront could also cost you less than financing options that charge interest. 

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Written by:

Maggie Aime, MSN, RN

Maggie's writing brings health topics to life for readers at any stage of life. With over 25 years in healthcare and a passion for education, she creates content that informs, inspires, and empowers.

Edited by:

Charlene Rhinehart, CPA

Charlene Rhinehart, CPA, is a personal finance editor at GoodRx. She has been a certified public accountant for over a decade.

Reviewed by:

Karla Robinson, MD

Karla Robinson, MD, is a medical editor for GoodRx. She is a licensed, board-certified family physician with almost 20 years of experience in health through varied clinical, administrative, and educational roles.

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