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Use Your HSA to Buy Groceries and Save 40%

The High Cost of Food

The average American household spends nearly $10,000 a year on food. That’s the average. Households in the Northeast spend almost $20,000 more.

What if I told you there’s a way to save 40% on groceries?

Let me explain.

HSAs Explained

There are these things called HSA or FSA accounts. Basically, they’re tax-incentivized accounts to spend on healthcare costs. The stupid thing about them is you’re extremely limited in what you can spend them on.

But employers will match your contribution up to a certain amount, so it’s kind of a no-brainer.

  • Have a baby? Yup, use your HSA to cover your deductible.
  • Break your leg and need crutches? Yup, use your HSA.
  • Diagnosed with diabetes and needing a prescription for Metformin? Yup, use your HSA.
  • Take your sick kid to the ER? Yup, use your HSA.

Most of these are reactive vs. preventive.

You know what's not reactive... FOOD.

The food we put into our bodies helps prevent things like diabetes, obesity, and a lits of other things from developing.

Plug: Go read Good Energy by Casey Means, and you’ll see what I mean. TLDR: our health and well-being have everything to do with what we put into our bodies.

So, are groceries covered under HSA? The short answer is generally no.

Letter of Medical Necessity (LMN)

This is where something called a Letter of Medical Necessity (LMN) comes in. It’s a doctor’s note explaining why a patient needs a specific treatment, service, or dietary change to address a legitimate medical condition.

Let me show you how this works.

Blood Work

It starts with blood work. Not the kind of blood work where your doctor glances at your results and says, “keep an eye on your cholesterol”.

I'm talking about blood work that tells a story. A story about why your health is the way it is, why you’re exhausted all day, why you're depressed, or why you can’t lose weight.

Blood work metrics tell us about specific medical conditions. For instance, if your blood work shows an elevated A1C (that's your blood sugar levels for the non-medical folks), you could be considered pre-diabetic (medical code R73.03). Now it’s not just “cut back on sugar”; it’s a documented condition for which certain foods can be medically necessary.

Here’s the point: the IRS recognizes these legitimate conditions when they carry an official medical code. That code is your ticket to legit tax savings.

This is where it gets fun.

With the right documentation - specifically, a Letter of Medical Necessity (LMN) - you can actually justify using your HSA funds for specific grocery purchases that help manage that condition. We're talking about saving a TON of money on grocery shopping.

So, how do you actually get reimbursed for your groceries?

From Lab Results to Grocery Receipts

Imagine a system that:

  1. Analyzes your blood work using AI
  2. Shows you which grocery items (shopping online) qualify for savings
  3. Gives you the documentation you need to get reimbursed

This isn't just wishful thinking; the pieces exist. We have the AI technology to analyze blood work, doctors who can approve LMNs, and clear IRS guidelines on what qualifies.

Here's an example:

  • You get blood work done at Quest or LabCorp.
  • Those results automatically go into a platform that says, “Congrats, you qualify for a diet-based LMN that covers certain low-glycemic foods.”
  • Next time you shop at Thrive Market or Whole Foods online, eligible items are automatically flagged with “HSA-qualified” because they align with your health condition.
  • At checkout, you pay normally but then submit for reimbursement through your HSA.

Here’s how it works under the hood.

Step-by-Step: How to Get Reimbursed

Before shopping online, you Install a Chrome extension, answer a quick health survey and upload your blood work. The system generates a pre-approved LMN (valid ~12 months) for your condition(s).

While Shopping Online (e.g., Thrive Market) the extension highlights foods that match your medically necessary diet (Think “Gluten-Free,” “Low Sugar,” etc.). Then you add items to your cart as usual.

At checkout, you pay as you normally would (credit card or debit—because some HSA cards auto-flag groceries). After purchase, the chrome extension prompts: “Generate your HSA Reimbursement Packet.” One click, and you get Your LMN (doctor-signed) and an annotated receipt showing which items qualify.

To submit for reimbursement, you log into your HSA portal, upload the PDF, and boom—expect a deposit in a few days or weeks, depending on your HSA admin.

That’s it. No complex runaround, no guesswork about which foods are covered or not.

Why Isn’t Everyone Doing This Already?

You might be wondering, “If this is so great, why isn’t everyone doing it?”

Well, a few reasons:

  • Preventive health isn’t mainstream. Most people don’t think about HSAs until they’re actually sick, so the idea of using them proactively for nutrition barely registers.
  • Personalized healthcare is rare. Your average doctor is too busy to deep-dive into your grocery list, so custom diet guidance falls by the wayside.
  • Incentives are skewed. Regulatory bodies and insurance providers focus on cost management rather than prevention.
  • AI is new to the game. The claim-submission process just hasn’t caught up with what modern technology can do.

Yes, some HSA-approved items are already happening today—think saunas, supplements, gym memberships, health trackers. But groceries, the biggest daily health lever, haven’t been touched… until now.

This strategy isn’t about “gaming the system.” It’s about using the tax code to invest in your health. The IRS framework is there, so why not use it?

Now what?

Start using your HSA money to keep you healthy now—not just when things go wrong.

If you want to be one of the first users, a potential investor, or a partner... email me at jordanbench@me.com.

TL;DR Recap

  1. Yes, you can legally buy groceries with HSA/FSA funds if you have a qualifying condition + proper LMN.
  2. Blood work can map to medical codes that unlock savings.
  3. Technology can automate LMN creation, highlight which groceries qualify, and generate a reimbursement packet.
  4. Your immediate saving: about 30-40% if you use an HSA.
  5. No direct partnerships with grocery stores needed. A simple Chrome extension can handle real-time tagging.

(Disclaimer: I’m not a tax professional or medical professional. Always consult your doctor and a qualified tax advisor for personalized advice. This post is based on my personal experience, research, and big-picture view of how tech can improve our lives.)