Can You Use HSA or FSA Funds for Medical Care Abroad?

Yes, HSA and FSA money can often pay for medical and dental care you receive outside the United States, as long as the care itself counts as a qualified medical expense under IRS rules. The country is generally not the deciding factor. What decides it is the kind of care: treating or preventing a disease or condition usually qualifies, while purely cosmetic procedures generally do not, no matter where they happen.

December is when this question gets urgent, because many health FSAs run on the calendar year and unused money can be forfeited. This guide explains what the IRS publications actually say, how year-end FSA rules work, which travel costs can count, and the paperwork that keeps a foreign claim from getting rejected. It is general information, not tax advice; for your own situation, check with your plan administrator or a tax professional.

What the IRS rules say about care abroad

The two IRS documents to know are Publication 502, which explains what counts as a medical expense, and Publication 969, which covers HSAs, FSAs and similar accounts. Publication 969 defines qualified medical expenses for an HSA by pointing to "medical care" as defined in section 213(d) of the tax code, the same concept Publication 502 explains for itemized deductions.

Publication 502 does not set a separate rule limiting medical care to US providers. The foreign-specific rule it spells out is about medicine. You can include a drug you buy and use in another country only if the drug is legal in both that country and the United States. Drugs you bring back or have shipped from abroad generally do not count, apart from limited cases where the import itself is legal.

Publication 502 also states that you cannot include amounts paid for illegal operations or treatments. In practice, that means the care should be lawful where you receive it, from properly licensed providers, and documented as medical care.

The big exception: cosmetic surgery

This matters more than anything else for readers of this site. Publication 502 says that, generally, you cannot include the cost of cosmetic surgery as a medical expense. It describes cosmetic surgery as procedures directed at improving appearance that do not meaningfully promote the proper function of the body or prevent or treat illness or disease.

There are narrow exceptions, such as surgery needed to improve a deformity related to a congenital abnormality. Publication 502 also specifically allows breast reconstruction after a mastectomy for cancer. But a rhinoplasty for appearance, a tummy tuck for contour or liposuction is generally not a qualified expense, whether you have it in Medellín or Miami.

The line can blur. A septoplasty to fix documented breathing problems is a different case from a cosmetic nose job, even if both happen in the same operation. If your procedure has a functional part, ask the surgeon to itemize it separately and to document the medical reason. Whether that portion qualifies is a question for your administrator or tax advisor, not something to assume.

For a sense of how dental and medication costs compare, see our breakdowns of dental costs in the USA vs Colombia and prescription drug costs.

Travel and lodging: what can and cannot count

Publication 502 allows some travel costs when the trip is primarily for, and essential to, receiving medical care. A trip taken mainly for a change of environment or general health does not qualify, even on a doctor's advice.

• Transportation. Costs of getting to and from medical care can count, including those of a parent who must travel with a child who needs care, or a nurse or other person who can give injections or treatment if the patient cannot travel alone.
• Lodging. Lodging away from home can count only if it is primarily for and essential to medical care, the care is provided by a doctor in a licensed hospital or equivalent facility, the lodging is not lavish, and the trip has no significant element of personal pleasure, recreation or vacation. The amount is capped at $50 per night for each person.
• Meals. Publication 502 says meals are not included when you travel for medical care (outside of meals that are part of an inpatient stay).

Two caveats. First, if the underlying procedure is cosmetic, the travel to get it does not become qualified just because it is travel for surgery. Second, adding sightseeing days to a medical trip can undercut the "primarily for medical care" requirement, so keep the medical and vacation parts of your costs clearly separate. Our guide to total episode cost shows how to track each piece.

FSA year-end: use it, carry it, or lose it

Health FSAs are generally "use-it-or-lose-it" plans, which is why December matters. If your plan year ends December 31, the money you elected for 2026 generally has to be used on expenses incurred during the plan year, unless your plan offers one of two relief options. Publication 969 describes both:

• Grace period. A plan can allow up to two and a half extra months after the plan year ends to incur expenses.
• Carryover. A plan can let you roll a limited amount of unused money into the next plan year. For plan years starting in 2026, the IRS increased the maximum carryover into 2027 to $680.

A plan cannot offer both a carryover and a grace period for a health FSA, and it does not have to offer either. Your plan may also have a claims deadline after the year ends for submitting receipts. All of this is set by your employer's plan, so look up your specific rules rather than relying on general articles.

For 2026 plan years, the IRS limit on employee salary reductions into a health FSA is $3,400. If you are deciding your 2027 election during open enrollment and you know a procedure abroad is coming, factor in what will actually qualify, not the full trip cost.

HSA rules are more flexible, with one firm limit

HSAs do not have a use-it-or-lose-it rule. The money stays in your account year to year. Publication 969 notes you do not have to take a distribution in the same year as the expense, which is why many people pay out of pocket and reimburse themselves later.

The firm limit is timing: expenses incurred before you established your HSA are not qualified medical expenses. You also need to keep records sufficient to show that a distribution was for a qualified expense that was not paid or reimbursed from another source. Distributions not used for qualified expenses are taxable and, per Publication 969, subject to an additional 20% tax, with no additional tax on distributions after you become disabled, reach age 65 or die.

Money in an HSA or FSA is also covered by a no-double-dipping rule: Publication 502 says you cannot also include expenses paid with tax-free HSA distributions or fully reimbursed by an FSA as itemized medical deductions.

Receipts, translations and currency: the paperwork that gets claims paid

A foreign claim is usually rejected for paperwork reasons, not because the care was abroad. Keep a complete file from day one.

• Itemized invoice from the clinic or hospital showing provider name, patient name, date of service, description of each service and amount
• Proof of payment (card statement, transfer confirmation or receipt)
• Prescriptions and pharmacy receipts for any medication bought and used abroad
• A note or report from the treating doctor describing the diagnosis or medical purpose
• The exchange rate you were charged, from your card or bank statement
• Translations of key documents if your administrator asks for them

Colombian clinics often issue an electronic invoice (factura electrónica, the standard tax invoice) in Spanish. Some administrators accept Spanish documents; others want a translation. Ask in advance, and ask the clinic whether they can issue an English summary alongside the official invoice. Because you may pay in pesos, your card statement showing the US dollar amount charged is useful evidence of the actual cost. Our piece on currency and medical pricing explains why the peso and dollar amounts may not match what you expected.

Also check whether your FSA or HSA debit card works abroad. Some cards are restricted to certain merchant categories, and a foreign clinic may not be coded in a way the card recognizes. Paying another way and submitting for reimbursement is often simpler.

A year-end checklist if you're planning care abroad

1. Find your plan year and relief option. Calendar year or not, grace period, carryover, or neither, and the claims deadline.
2. Check what qualifies. Separate medical and dental care from anything cosmetic, and ask your administrator about any procedure that combines both.
3. Ask about foreign documentation. Language, currency and invoice requirements.
4. Time the date of service. Match the expense to the plan year whose money you want to use.
5. Keep your file. Store every receipt and statement with your tax records.
6. Get professional advice if the numbers are large. A tax professional can review your specific case.

If you are also weighing how your deductible resets in January, our explainer on the deductible trap covers when paying cash abroad can cost less than using insurance at home.