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Can You Use an FSA or HSA to Pay for Medical Cards and Cannabis?


If your employer offers a Flexible Spending Account (FSA) as part of your employee benefits package or if you’re the owner of a Health Savings Account (HSA) apart from an employer, you may be wondering if you can use an FSA or HSA to pay for medical marijuana.

Unfortunately, medical cards and cannabis are not eligible expenses covered by either FSAs or HSAs. These pre-tax accounts may be used for numerous medical expenses but not for marijuana or supplies.

Learn more about FSAs and HSAs, and how to pay for a medical marijuana card when these accounts do not cover it.

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Why Don’t FSAs and HSAs Allow Reimbursement for Cannabis?

While FSAs and HSAs cover a wide range of expenses like doctor visits, prescription drugs, and annual vision exams, medical treatment with cannabis is not included because it is illegal under federal law.

And medical marijuana is not the only ineligible item in a typical FSA or HSA. Cosmetic procedures for cosmetic purposes (rather than to address a congenital issue) are also not considered eligible in most flexible spending and health savings accounts.

In addition, FSAs and HSAs are not the only entities that fail to offer reimbursement for medical marijuana. Insurance companies, Medicare, and Medicaid, will not cover your medical cannabis expenses either.

Cannabis for medical purposes is not deemed a medical necessity, according to most health insurance plans.

One reason cannabis is not considered a medical necessity is that it is not FDA-regulated. Even if you have been diagnosed with a specific health condition that cannabis has shown to help treat, like depression or anxiety, your health insurance probably won’t offer coverage.

As federal government entities, Medicare and Medicaid do not cover cannabis, regardless of any documented medical reasons for using it. As long as cannabis remains a Schedule I controlled substance at the federal level, it is unlikely for these rules to change.

What Do HSAs and FSAs Cover?

While these accounts may not cover medical marijuana, they do cover a wide range of medical expenses like:

  • General medical and dental care
  • Prescription medications
  • Nursing care
  • Lab costs
  • Vision expenses, including exams and eyewear
  • Orthodontic treatments
  • Acne treatments
  • COBRA premiums
  • Guide dogs and braille books
  • Hearing aids
  • Fertility treatment
  • Child care and dependent care
  • Vaccinations

The above is a partial list of qualified medical expenses for standard FSAs and HSAs. Reach out to your benefits administrator for a complete list of eligible medical expenses.

How to Pay for a Medical Marijuana Card

Leafwell offers convenient payment options for your medical marijuana card, including all major credit or debit cards. We also accept prepaid cards as payment if they hold enough funds to cover the cost.

Unfortunately, Leafwell doesn’t accept cash or checks.

How to Pay for Medical Cannabis

You have several options available to you when purchasing medical marijuana. While some dispensaries only accept cash, others may have more flexible payment options. Cannabis dispensaries may or may not accept the following payment methods for medical cannabis products:

  • Credit or debit cards though it’s complicated, as not all banks will approve the transaction, once again due to the federally illegal status of cannabis.
  • Electronic wallet apps like Venmo, PayPal, or Apple Pay.
  • On-site ATMs allow you to withdraw cash if you don’t carry any.

Cash remains the most widely accepted (and sometimes the only accepted) payment option for purchasing medical marijuana in the United States. Even in states where medical-use marijuana is legal, federal restrictions make it difficult for dispensaries to accept credit cards and debit cards for payment.

Are There Any States That Require Insurance to Cover Cannabis?

Five states have established rules requiring insurance companies to cover medical marijuana expenses in the commercial and/or Medicaid markets. These include:

  1. Hawaii Bill SB2586: includes medical cannabis as eligible for reimbursement up to a maximum limit each month.
  2. New York Bills A2824 and S2054: Requires coverage of medical marijuana (or “medical marihuana”) on public insurance programs.
  3. Maine Bill LD 942: requires accident and injury disability insurers to reimburse for medical marijuana if provided to a patient.
  4. Massachusetts Bill H.3875: requires coverage of medical marijuana under Medicaid and commercial health plans.
  5. Wisconsin Bill SB 377: requires disability insurance companies and self-insured health plans that already provide prescription drug coverage to cover the medicinal use of THC.

However, as FSA and HSA are pre-tax money and cannabis is not a “prescription” drug, HSAs and FSAs will not likely cover medical cannabis expenses. It is unlikely that another aspect of insurance will cover medical cannabis expenses.

The Bottom Line

Medical cannabis and medical cards are generally not covered in FSAs and HSAs, as cannabis remains illegal federally and is not considered a medical necessity due to a lack of FDA approval.

Insurance companies, Medicare, and Medicaid also refrain from covering medical marijuana in most states because of federal laws. Contact your benefits administrator for a complete list of covered costs in your healthcare plan, and know that you have other options to pay for medical marijuana.

Apply for a medical marijuana card in your home state. Leafwell’s virtual clinic is open and here to serve you with valuable guidance as you move through the application process.

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