If your doctor has recommended medical marijuana in Louisiana, you might be asking whether you can pay for it using your health savings account (HSA). HSAs are designed to allow tax advantages for people on less expensive health plans. They are a way you can save money for medical expense and get significant tax advantages. Your money is not taxed when it goes into the account and is not taxed when it comes out as long as you are spending it on medical stuff.
So, can HSA be used for medical marijuana in Louisiana? Let’s find out.
HSAs, Medical Marijuana, and Federal Law
The IRS has tax requirements for what is considered a qualified medical expense for HSA purposes. This generally maps to what you are allowed to deduct if you itemize deductions, with the exception of insurance premiums. The CARES Act also allowed people to spend HTC funds on over-the-counter medicines. This defines medical expenses as “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease.”
That would make it seem that medical marijuana is a reasonable expense that you can use your HSA for when it is recommended by a doctor and you are taking it as directed.
However, there’s a catch. Because marijuana is still illegal at the federal level, you actually can’t use HSA funds to pay for medical marijuana. While you can use it to pay for experimental drugs, marijuana is still a controlled substance.
If you do use your HSA to pay for medical marijuana, the amount becomes taxable income and must be reported. In addition, if you are under the age of 65, the IRS will levy a 20% penalty. This makes it cheaper to pay for it with your own money. If you are over 65, then you only have to pay the tax and may be using the HSA more like a typical savings account.
While there is a push for federal legalization, it’s still pretty stalled and for now, no, you can’t use your HSA. This goes for all states, even ones which have legalized marijuana for recreational purposes.
What About Other Legal Issues in Louisiana?
Louisiana law allows medical marijuana for certain allowed conditions, which include cancer, intractable pain, PTSD, or any other condition if a physician thinks it’s necessary.
Currently, the law only allows medical marijuana in a non-smokable preparation. However, on June 22, the governor signed a law that allows smokable preparations, including flower, to be used. This comes into effect January 1, 2022.
Louisiana does not allow home cultivation of marijuana by patients and has possession limits…basically, a 30-day supply at any given time. You have to get your marijuana at one of the state-licensed dispensaries.
In general, it’s not safe to consume marijuana, especially by smoking, in public. New Orleans has locally decriminalized possession and reduced it to a civil offense, so you might be able to get away with it there. However, it is better to take it in private.
Finally, medical marijuana is not exempt from driving while impaired laws (for that matter, neither are legal drugs that might impair your judgment). This means that you should not drive after taking marijuana until you know how it will affect you and can be sure that you aren’t impaired. Generally, medical marijuana strains have less THC than recreational strains. However, for some conditions, THC is helpful.
Make sure that you follow all of Louisiana’s laws regarding medical marijuana. And, again, you cannot use your HSA to purchase medical marijuana without taking a tax penalty. This is going to remain the case even if Louisiana legalizes marijuana for recreational use, as it has to do with federal law. Even after federal law changes, your HSA provider can have their own rules about allowed expenses.
Interested in Learning More?
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