Does Insurance Cover CBD? Otherwise known as Obamacare, this act states that it was implemented in an effort to boost the nation’s economy via mandating a majority of the population to purchase HSA Store Can you pay for CBD oil with an HSA? Are you wondering if you can pay for CBD oil with a health savings account (HSA), flexible spending account (FSA), or health reimbursement arrangement (HRA)?
Does Insurance Cover CBD?
Otherwise known as Obamacare, this act states that it was implemented in an effort to boost the nation’s economy via mandating a majority of the population to purchase their own health insurance plans if not provided one as a benefit of employment.
According to the Center on Budget and Policy Priorities, this goal has been met, at least with regard to Medicaid since the projected costs of operating this federal program in 2019 was $794 billion, yet is now 21.5 percent less than anticipated, or $623 billion. 
Though, if you ask the general public their thoughts on this program, the response is more mixed.
For some, this act was a blessing because it afforded people the opportunity to purchase health insurance at a reasonable rate regardless of any pre-existing health conditions. For others, specifically those who had previously gone without insurance in an effort to save cash, it created an additional financial burden or face the risk of being assessed a fine.
Either way, this act has forced United States citizens to really question their insurance policy and the benefits it provides. And one benefit a number of people are wondering about is whether insurance providers are required to pay for CBD (cannabidiol) when it is taken for its health benefits. In other words, does health insurance cover CBD oil?
In the past, this lack of accepted medical use and safety has been, in part, due to a lack of research thanks to hemp’s illegal status. However, actions being taken by federal agencies such as the U.S. Food and Drug Administration (FDA) could begin to change this reasoning, particularly by this agency approving the first ever prescription drug to include a marijuana derivative.
This was in June of 2018 and that drug was Epidiolex. Epidiolex can now be prescribed to help reduce difficult-to-control seizures in patients suffering from two fairly rare forms of epilepsy: Dravet syndrome and Lennox-Gastaut syndrome.
While this is one step closer to the legalization of medical marijuana, it doesn’t change the fact that this particular drug is still illegal on a federal level and, therefore, enforceable by the Drug Enforcement Administration (DEA). This is even though some states have legalized medical marijuana and/or marijuana used for recreational purposes.
Does this mean that you can’t get any help with covering the cost of products that contain cannabinoids such as CBD ? According to what some people are discovering, the answer is no.
The store further states that “the IRS [Internal Revenue Service] has yet to issue guidance on the eligibility status of CBD oil and products,” so maybe some HSA plans are taking this absence of guidance as implied approval of CBD -containing products?
The IRS Publication 502, which is titled “Medical and Dental Expenses,” states that controlled substances such as marijuana are not deductible as a medical expense and neither are nonprescription drugs and medicines, with the exception of insulin.
CBD: HSA Eligibility
CBD (Cannabidiol) oil and other CBD products are not eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA).
What is CBD oil and CBD products?
CBD, which stands for cannabidiol, is the second-most prevalent of the active ingredients behind THC, the psychoactive element found in marijuana. While CBD is an essential ingredient for those who utilize medical marijuana, CBD oil and other products are typically derived from hemp plants. Hemp (a cousin of the marijuana plant) contains little to no traces of THC, and CBD products are typically extracted by steeping the stems, seeds and leaves in alcohol or oil. (Harvard Health Publishing)
CBD is technically legal in all 50 states as long it’s derived from hemp. Hemp was removed from the Controlled Substances Act in late 2018, which ensures that it will no longer be treated as an illegal substance under federal law (FDA). But CBD products that are derived from marijuana re more highly-regulated at the state level. THC-derived CBD is legal in the following states: Alabama, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia, Wisconsin and Wyoming. (NORML)
Of course, there are experts with more details on the subject. The National Organization for the Reform of Marijuana Laws (NORML) has more information on what CBD products are legal in your state.
What is CBD used for?
Proponents of CBD claim its benefits include reduced anxiety, inflammation, arthritis and overall pain relief. Unlike prescription medications, there are few adverse side effects from CBD. Patients generally cannot become addicted to CBD, which can make it preferable to traditional pain pills. In 2018, the FDA approved a CBD-based drug to treat seizures for people with a rare type of epilepsy (FDA).
CBD usually comes in a few different forms, including oil, tablets and creams. Many veterinarians even sell CBD products for animal anxiety.
Is CBD FSA-eligible?
The IRS has yet to issue guidance on the eligibility status of CBD oil and products, so they are ineligible for purchase with FSA, HSA, HRA, LPFSA and DCFSA funds at this time.
Can you pay for CBD oil with an HSA?
Are you wondering if you can pay for CBD oil with a health savings account (HSA), flexible spending account (FSA), or health reimbursement arrangement (HRA)? You may also be wondering if this item is eligible or ineligible for reimbursement with your HSA, FSA, or HRA.
No, unfortunately you can’t use your HSA, FSA, or HRA to pay for CBD oil. In fact, if you do pay for CBD oil with one of those accounts, you may be subject to a penalty.
HSA fast facts
- Health savings accounts (HSAs) were created as part of the Medicare Prescription Drug, Improvement, and Modernization Act, or MMA, signed into law by President George W. Bush on December 8, 2003. The MMA was the largest overhaul to Medicare in the program’s history.
- HSAs are only available as part of a high-deductible health insurance plan (HDHP).
- As part of the 2020 CARES Act, over-the-counter medications and menstrual care products became eligible for purchase with an HSA.
- Contributions to an HSA can be made by an employer and/or employee on a pre-tax basis. You can find current and historical HSA contribution limits on this site.
- Funds in a health savings account can be invested in a similar way as other retirement accounts and are a rare example of an account that’s triple tax advantaged. That is, funds are contributed pre-tax, can be withdrawn for eligible medical expenses without taxation, and if you invest the funds within your HSA the earnings or interest are tax free. There are also many other benefits of HSAs that you may not know about.
- Funds can be withdrawn at any time for any reason, but funds withdrawn for non-approved medical expenses before the age of 65 are subject to income taxes and an additional penalty.
- You can no longer contribute to an HSA once you’re enrolled in Medicare.
Explore HSA eligibility for other products and services
Common HSA providers
What about FSA and HRA eligibility?
The same HSA eligibility status for CBD oil applies to flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) as well.
Coming up with accurate eligibility status for the list of HSA eligible expenses can be a challenge at times. The IRS only provides a partial list of eligible expenses, so consumers and even insurance companies are left to wonder exactly what products are eligible.
To help illustrate this point, I had a visitor email me to ask if regenerative medicine such as platelet rich plasma (PRP) and stem cell treatments are HSA eligible. I did extensive research and the answer pointed toward “probably not but check with your provider to see if they’ll cover it.” So I suggested that he consult them for guidance. His response was that he did and even they didn’t know!
In a case like that, I would suggest getting a definitive answer in writing from your provider. If you can’t get one, the safe choice is to assume it’s not eligible and not expense it.
There are also cases where one source says an expense is eligible and another says it’s not. In those cases I do my best to research the expense further and come up with an answer that seems most likely for the greatest number of providers.
At any rate, these are the primary sources I use for expense verification. Keep in mind this is not an exhaustive list, and I will frequently check product manufacturer websites for eligibility statuses, as they often will have done their own due diligence if they suspect people may want to use their HSA or FSA to pay for their products and they fall into the uncertain category.
– IRS – IRS – U.S. Congress – Wikipedia
This page is intended to be an educational reference only. Please check with your HSA administrator or health insurance provider to confirm if you can pay for CBD oil with your HSA card before making any purchases.
A good rule of thumb is that if your doctor diagnosed you with a specific medical condition or ordered a treatment, product, or prescription specifically for you, your health savings account should cover it. Sometimes your HSA will even cover items that it normally wouldn’t if you have a letter of medical necessity signed by your doctor. Again, you should check with your HSA administrator before any purchase if you have any questions about an item being eligible or ineligible.
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