Qualified Medical Expenses
For HSA, MSA, FSA, and HRA purposes, a medicine or drug will be a qualified medical expense only if the medicine or drug:
This applies to amounts paid after 2010. However, it does not apply to amounts paid in 2011 for medicines or drugs purchased before January 1, 2011.
Increase in Additional Tax on Certain Distributions Not Used for Qualified Medical Expenses
The tax on distributions from health savings accounts (HSAs) and Archer MSAs made after December 31, 2010, that are not used for qualified medical expenses, is increased to 20%.