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Eye Exam & Glasses; Interpreting IRS Rules

September 26th, 2009 at 09:02 am

Yesterday I got my eyes examined & ordered 2 new pairs of glasses. I got the 2nd pair for when I'm using the computer. It has been suggested in the past that I get a 2nd pair, but this go round the eye doc just flatout said that I need a 2nd pair and explained that my focusing muscles are getting weaker (probably due to a combination of getting older plus my current job involves heavy computer use of things that are often hard to read). This doc just does exams and writes prescriptions (which he wrote out for 2 pair); he does not sell glasses, so does not have a financial incentive to get me to buy 2 pair.

This was my first exam and new glasses since we opened our HSA.

I paid for the exam & the glasses with my HSA. Checked the IRS regs (Pub 502 which defines reasonable medical expenses for deductions and that covers what can be paid for using an HSA) and as is often the case, the rules are open to interpretation.

This is what it says about eyeglasses:
"You can include in medical expenses amounts you pay for
eyeglasses and contact lenses needed for medical reasons.
You can also include fees paid for eye examinations."

So, it's very clear that the eye exam could be paid for with the HSA. But the glasses? What exactly do they mean when they say "needed for medical reasons"? Are they just trying to exclude contacts that people wear purely for cosmetic purposes? Or is their a higher standard?

I'm extremely nearsighted with astigmatism. I know that if I don't wear bifocals my eyesight will continue to get worse. I know that without my glasses I cannot drive a car, nor move around much without the risk of serious injury. (My own hand does not come in to complete focus until it is 4 inches from my face. So without my glasses I would be tripping over or running in to things and injuring myself.) Does this qualify as "medical reasons"? I certainly think so. But would an IRS audtitor agree? If they asked if my glasses were medically necessary, I suppose I'd just ask them to try mine on and tell me what THEY think.

14 Responses to “Eye Exam & Glasses; Interpreting IRS Rules”

  1. LuxLiving Says:

    Big Grin

  2. Ima saver Says:

    I think that qualifies as a medical neccessary reason.

  3. creditcardfree Says:

    I think it qualifies, too. Of course, I'm not a legal authority!! I'm right there with you..can't see clearly without glasses a few inches in front of my face.

  4. jewels3 Says:

    If you need glasses to see or drive, they are medically necessary. (such as your case). If you buy colored contacts to change your eye color, or buy eyeglasses just so you can look fashionable, these are not medically necessary and would be excluded.

  5. frugaltexan75 Says:

    I would say that if a medical professional prescribes something for you, then it would be considered a medical necessity.

  6. LuxLiving Says:

    I'm interested in reading your proposed post on "Grandparents & Great Depression".

    How's that coming along? Big Grin

  7. monkeymama Says:

    Missed this post when I was on vacation.

    Prescription = "medically necessary." Any prescription eyewear would count.

  8. scfr Says:

    Thank you monkeymama! Nice to have a pro weigh in.

  9. Jerry Says:

    Definitely, prescription eyeglasses are called "prescription" for a reason! I used my HSA insurance benefits for eyeglasses in the past, although now I am living overseas. This leads me to have to pay out of pocket, but things are a lot cheaper here so I think we can swing it this time. I need new glasses, too, I am noticing it in lectures lately that it is hard for me to see the board. Grr.
    Jerry

  10. LostOnline Says:

    I just started wearing glasses, my vision isn't so bad & I even go with out them practically all weekend. I do not need them to drive according to the DMV but I won't drive without them. My Insurance only pays for glasses if they are "Medically Necessary" So I have to pay out-of-pocket for them. I don't know where the line is drawn, but I think Driving is a good indicator.

  11. LostOnline Says:

    Just read a Harvard Med report notes that says 20/40 or worse is Medically Necessary "Because if you have slightly reduced vision, you may still be able to function essentially normally." I'm not sure if that's where you need them to drive but If you do I think, & I'm sure pedestrians would agree, it's 'Medically Necessary' for the person you would have hit had you not worn them.

  12. Matt Says:

    LostOnline gave a good answer. However, "medically necessary" is a term of art. That is, it means diff. things in diff. contexts. Prescribed drugs or devices are generally considered medically necessary unless distribution is controlled and so obtaining them for any reason is restricted by prescription. For example, many health plans reject propecia claims if they are Rxed for hair loss. But if they are Rxed for prostate issues, the Rx is reimbursed. However any Rxed drug can be paid for by an HSA, so you can pay for propecia via HSA even if it's for hair loss. This is b/c hlth insurers don't view hair loss relief as "medically necessary". But rather than get into the 2nd-guessing-the-MD game, the IRS just allows all Rxed items/drugs to be paid via HSA, and in some cases, even stuff that isn't.

    Opticians and opthamologists have legal authority to Rx lenses, frames, and certain drugs. As long as you have an Rx from a recognized legal practitioner who can write Rxs, anything they Rx to you is HSA-reimbursible. Now if you were to buy OTC reading glasses at the drug store, those aren't buyable via HSA since they don't have an Rx behind them-- unless you buy them b/c they match an Rx from an optician. However the practicioner's ID and Rx number must be associated with the purchase of the glasses if you buy it w/ HSA money.

    See, clear as mother's milk. Smile

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