Common HSA Claims That Are Ineligible (And Why)

Health Spending Accounts (HSAs) are powerful tools, but they are not unlimited.

A common misunderstanding is that if something is health-related, or provided by a licensed practitioner, it must be eligible.

In reality, HSA eligibility follows the same rules that apply to the Medical Expense Tax Credit (METC).

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Practitioner Status Does Not Make Everything Eligible

CRA maintains a list of authorized medical practitioners for METC purposes. That list answers only one question:

If a qualifying medical service is provided, who is allowed to provide it?

It does not mean:

• Everything the practitioner sells is eligible
• Wellness or lifestyle services are eligible
• Products sold in clinics are eligible
• Memberships or subscriptions are eligible

The nature of the expense is evaluated, not the provider’s credentials, marketing language, or how the invoice is presented.

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Services vs Products

This is one of the most common reasons claims are ineligible.

Services that may be eligible include diagnostic, therapeutic, or rehabilitative services performed to treat or manage a medical condition.

Products such as supplements, herbs, vitamins, remedies, consumables, take-home items, and equipment or supplies sold directly by clinics are genereally not eligible.

Even if a practitioner recommends the product, sells it during an appointment, or includes it on a clinic invoice, a medical appointment does not convert products into eligible medical expenses.

A product may only qualify if it meets the definition of an eligible medical device or supply and is prescribed where required to treat a specific medical condition.

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Medical Service vs Wellness

The service must be a medical service, meaning a diagnostic, therapeutic, or rehabilitative service performed by that practitioner acting within the scope of their professional training

Wellness and lifestyle services are not eligible.

Common examples include general wellness consultations, preventive care without a medical condition, stress management or lifestyle coaching, longevity or optimization programs, and biohacking or performance enhancement.

Even when provided by a licensed practitioner, wellness-focused services are not eligible medical expenses.

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Programs vs Memberships

Some programs may be eligible because they represent actual medical treatment delivered over time.

Examples include orthodontic treatment or ongoing physiotherapy following an injury.

Memberships and access fees are not eligible.

Memberships are payments for access or availability, not for medical services.

Common examples include monthly clinic memberships, subscription or “care plan” models, fees paid solely to secure future availability, and charges not tied to a specific medical service already delivered.

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Timing of Expenses Matters

A medical expense is incurred when medical treatment begins, not when payment is made.

‍One-off services
For single services such as a massage, physiotherapy visit, or dental appointment, the expense is only eligible on the date the service is actually provided.

Paying in advance or booking an appointment does not make the expense eligible before the service occurs.

‍Defined treatment plans and programs
For defined treatment plans that involve ongoing medical care, eligibility begins when the treatment plan starts.

Once treatment has commenced, amounts paid toward that plan become eligible.

Payments made before any clinical treatment has begun are not eligible until treatment starts.

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Common Practitioner-Specific Cases

Below are examples of claims that are commonly submitted but are often ineligible based on what was purchased, how it was structured, or when it was incurred.

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Naturopathic services

‍Generally eligible

• Services that treat or manage a medical condition
• Care provided by a licensed naturopath acting within scope

‍Not eligible

• General wellness or preventive care
• Lifestyle, optimization, or longevity services
• Supplements, herbs, IV drips, or detox products
• Any take-home products, even if recommended or sold during a visit

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Acupuncture

‍Generally eligible

• Acupuncture services provided by a licensed acupuncturist, where recognized

‍Not eligible

• Herbs or remedies provided alongside treatment
• Natural medicine or take-home products
• Bundled invoices that include non-service items

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Massage therapy

‍Generally eligible

• Massage therapy services

‍Not eligible

• Oils, tools, or equipment
• Memberships or subscription-style plans
• Payments for access rather than services i.e. an entry fee to access a wellness spa

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Dieticians and nutritionists

‍Generally eligible

• Nutrition services provided to treat or manage a medical condition

‍Not eligible

• General healthy eating or weight loss plans
• Performance or athletic nutrition
• Lifestyle coaching
• Food, supplements, or nutritional products

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Chiropractors

Generally eligible

• Chiropractic services provided within scope

‍Not eligible

• Pillows, cushions, or posture supports
• General comfort or ergonomic supports
• Products marketed for posture, sleep, or general wellness

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Alternative therapies

Not eligible

• Wellness-based or energy-focused services
• Holistic or non-clinical alternative practices
• Services not recognized as medical treatment under CRA rules

Practitioner involvement does not change eligibility.

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Common Categories of Ineligible Expenses

Expenses are generally ineligible when they fall into one or more of the following categories:

• Products and consumables
• Supplements and nutritional items
• Wellness and alternative practices
• Fitness and lifestyle programs
• Cosmetic or aesthetic services
• Memberships and access fees
• Administrative charges, missed appointment fees, or penalties
• Prepayments or retainers not yet applied to delivered care
• Expenses reimbursed, or eligible to be reimbursed, by another plan

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Keeping Your HSA Compliant

HSAs must follow PHSP requirements to protect the business funding the plan, the employee receiving reimbursements, and the long-term compliance of the plan.

If an expense is not a qualifying medical service, incurred for medical treatment, at the time the service is provided, it is not HSA-eligible.

These rules exist to ensure HSAs remain compliant, defensible, and sustainable for everyone involved.

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Using a Wellness Spending Account

Many of the expenses listed above are commonly covered under a Wellness Spending Account (WSA), based on the allowable categories defined in the plan.

Unlike HSAs, WSAs are not limited to the Medical Expense Tax Credit (METC) criteria and can be used for broader health, wellness, and lifestyle support.

‍It’s important to note however that WSAs are a taxable benefit to the employee.

Common examples that are often WSA-eligible include:

• Supplements, vitamins, and nutritional products
• General wellness or preventive services
• Lifestyle, stress management, or performance programs
• Fitness, movement, or recovery services
• Wellness memberships or subscriptions
• Non-clinical alternative or holistic services

If you have both an HSA and a WSA, expenses should always be submitted to the appropriate account based on eligibility rules.

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