The 3 Types of Expenses

MSA funds can be used on a wide range of expenses, with varying impacts to a member’s plan deductible and income tax liability.

Medicare A and B Expenses

Medicare A/B expenses include many items and services, like inpatient hospital care, doctor office visits, lab tests and more.

  • See all Medicare expenses at medicare.gov/coverage

  • All Medicare A/B expenses are part of a larger category of expenses called Qualified Medical Expenses (QMEs).

  • QMEs are defined by the Internal Revenue Service (IRS).

Medicare A/B expenses charged by Medicare-accepting providers count toward the MSA deductible.

Members can pay these expenses with MSA funds, out-of-pocket funds or a combination of both.

Count Toward Deductible?
Pay With MSA Funds?
Tax And Penalty-free?

Our financing program, a Fenyx Health Group MSA exclusive, helps members manage, pay for and save on Medicare A/B expenses.

Note: If a member receives Medicare A/B services from a provider who has completely opted out of Medicare, the services will not count toward the plan deductible. Also, excess charges from non-participating but Medicare-accepting providers do not count toward the plan deductible. These two types of costs are also not covered under Fenyx Health Group MSA’s financial program.

Other Medical Expenses (Non-Medicare A/B QMEs)

Some QMEs are not covered by Medicare, such as long-term care, routine dental cleanings, over-the-counter drugs and more.

  • See all QMEs at irs.gov/publications/p502 and irs.gov/publications/p969

  • MSA funds can be used tax-free and penalty-free to pay some costs of other (ancillary) benefit plans like a standalone Medicare prescription drug (Part D) plan, a dental plan, vision plan and more.

Other QMEs do not count toward the MSA deductible, even if they are charged by Medicare-participating providers.

Members can pay these expenses with MSA funds, out-of-pocket funds or a combination of both.

Count Toward Deductible?
Pay With MSA Funds?
Tax And Penalty-free?

Non-medical Expenses

A non-medical expense is anything not a QME. This includes food, groceries, rent or mortgage payments, clothing, electronics and more.

Non-medical expenses do not count toward the deductible.

Members can pay these expenses with MSA funds, out-of-pocket funds or a combination of both. MSA funds spent on non-medical expenses are taxed as income and may be penalized.

Count Toward Deductible?
Pay With MSA Funds?
Tax And Penalty-free?

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