Reimbursable Medical Expenses for Health FSA’s
- Air Conditioner to Treat Illness
- Acupuncture Treatments
- Automobile Modifications
- Contact Lenses & Solutions
- Dental Exams & Procedures
- Diagnostic Tests
- Drugs (prescription)
- Eye Glasses (reading glasses included)
- Fertility Treatments
- Lamaze Classes & Lactation Supplies
- Massage Therapy
- Orthodontia (children and adults)
- Over the Counter Drugs & Items
- Oxygen Equipment
- Seeing-eye Dog
- Smoking Cessation Programs
- Special Education Fees
- Syringes (diabetic supplies)
- Weight Loss Programs
(Example of) Capital Expenses to Treat Illness
Capital Expenses You may include amounts you pay for special equipment installed in your home, or for improvements, if their main purpose is medical care for you, your spouse, or an eligible dependent. The cost of permanent improvements that increase the value of the property may be partly included as a medical expense. The cost of the improvement is reduced by the increase in the value of the property. The difference is a medical expense. If the value of the property is not increased by the improvement, the entire cost is included as a medical expense.
Certain improvements made to accommodate your home to your disabled condition, or that of your spouse or your dependents who live with you, do not usually increase the value of the home and the cost can be included in full as medical expenses. These improvements include, but are not limited to, the following items:
- Constructing entrance or exit ramps for your home,
- Widening doorways at entrances or exits,
- Widening or otherwise modifying hallways and interiors doorways,
- Installing railings, support bars, or other modification to bathrooms,
- Lowering or modifying kitchen cabinets and equipment,
- Moving or modifying electrical outlets and fixtures,
- Modifying fire alarms, smoke detectors, and other warning systems,
- Modifying stairways,
- Modifying hardware on doors,
- Grading ground to allow access to the residence
Only reasonable costs to accommodate a home to a disabled condition are considered medical care. Amounts you pay for operation and upkeep of a capital asset qualify as medical expenses, as long as the main reason for them is medical care.
Improvements to property rented by a person with a disability. Amounts paid by a person with a disability to buy and install special plumbing, mainly for medical reasons, in a rented house are medical expenses.
- Capital Expense Work Chart:
- 1. Enter amount you paid for the improvement $________
- 2. Enter increase in value of your home. If Line 2 is equal to or more than Line 1, you have NO deduction. Stop here. $________
- 3. Subtract Line 2 from Line 1. This is your medical expense. $________
Acupuncture You may include the cost of acupuncture treatments when the treatments are prescribed for the treatment of a specific medical condition or disease. Acupuncture for the purpose of weight loss will not be eligible for purely general health purposes. If your Acupuncturist does not provide a diagnosis code on the receipt, you will need to have your physician complete a Medical Determination Form available on the Forms section of our website.
Alcoholism Expenses You may include amounts you pay for an inpatient’s treatment at a therapeutic center for alcohol addiction. This includes meals and lodging provided by the center during treatment.
You may also include cost you pay to attend meetings of an Alcoholics Anonymous Club if your attendance is pursuant to medical advice that attendance is necessary for the treatment of a disease involving the excessive use of alcoholic liquors.
Car Expenses You may include amounts you pay for special hand controls installed in your car if their main purpose is for the use of a person with a disability. The amount by which the cost of a car specially designed to hold a wheelchair is more than the cost of a regular car is a medical expense.
Costs of operating the specially equipped car are not considered a medical expense.
Contact Lenses Expenses
Contact Lenses You may include amounts you pay for contact lenses needed for medical care.
You may also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner.
Any fees paid for eye examinations may be included as well.
Deductibles You may include the costs associated with satisfying your yearly deductibles.
You may include out of pocket expenses for dental work that is medically necessary. Some examples include, but are not limited to, routine cleanings, xrays and exams, sealants, crowns, dentures and implants. Cosmetic procedures are not reimbursable unless they are directly related to the proper functioning of the body. Teeth bleaching expenses will not be reimbursed under the FSA Plan. Veneers are often considered to be cosmetic in nature and always require a Medical Determination Letter, found on our website.
Diagnosis Includes diagnosis of disease affecting any part or function of the body.
Drugs or Biologicals The drug must be prescribed by a licensed practitioner as defined by the Social Security Act under Section 1861(r) (M.D., O.D., Optician, D.D.S., Chiropractor) The drug must be filled by a prescription and filled by a licensed pharmacist (except for insulin). Drugs that are considered cosmetic in nature, such as weight loss drugs, must be accompanied by a letter from your physician stating the medical condition or disease the drug is treating and the length of treatment time. FDA approved drugs that are purchased while in a country outside of the USA will be reimbursed. FDA approved drugs that are purchased outside of the country while you are not traveling or purchased on the internet and shipped into the country will not be eligible for reimbursement.
Eyeglasses Prescription lenses and frames for prescription lenses are reimbursable. Prescription sunglasses are also reimbursable. Reading glasses that are corrective and can be bought without a prescription are eligible.
Fertility Expenses The costs that you pay for fertility testing and treatment of infertility for you or your spouse are reimbursable under the Plan. This includes the cost of drugs, shots, tests and surgeries performed by a physician on you or your spouse. This would not include any costs paid for the use of a surrogate or the eggs of a surrogate or donor.
You may include the cost of the Lamaze classes for the mother. Any cost associated for a coach are not eligible. Only those cost associated with the aleviation of pain or discomfort are eligible. CPR classes are not eligible for reimbursement.
Breast pumps and lactation supplies constitute medical care under Code Sec. 213(d); because, like obstetric care, they affect body structure or function of lactating women; thus, if remaining requirements of Code Sec. 213(a); are met, the cost of breast pumps and lactation supplies are eligible medical expenses.
Massage Therapy Must be medically necessary to treat a specific medical condition or disease. You must submit a Medical Determination Letter from your physician stating the medical condition/disease and the length of the treatment plan. If only to relieve to stress, it is not eligible.
Obstetrician Prepaid fees for the delivery are eligible for reimbursement the date of the child’s birth or as they are paid to the provider. If you wish to seek reimbursement for expenses prior to the birth of the baby, then you must pay those expenses to the provider before seeking reimbursement.
Orthodontia There are 3 methods available to participants for orthodontia reimbursement. The three available methods are as follows:
1. You may submit the monthly payments that you have scheduled with your orthodontist over the course of the treatment. You may also submit the initial downpayment paid for the placement of the braces.
2. You may submit the annual amount that you have paid to the provider for the cost of treatment during the Plan Year. If the provider charges $1000.00 per year, you may be reimbursed for that amount at the start of the Plan Year, as long as you have paid the provider.
3. You may submit the entire cost of the orthodontist’s fee at one time and be reimbursed in one lump sum, as long as you have paid the provider, even though the services rendered will extend past the Plan Year in which the payment is made.
Certain Over The Counter Items May Be Reimbursed By Health FSA’s, HRA’s and Other Employer Provided Health Plans
Due to the Patient Protection and Affordable Care Act and the Health Care Reconciliation Act of 2010, over the counter drugs and medicines which were once considered to be eligible items for reimbursement under Health FSA and HRA plans will require a written prescription from a licensed physician in our State as of January 1, 2011. Any over the counter drug or medicine purchased on or after January 1, 2011 will require a written prescription.
Individual state laws place time limits on prescription. Depending on the drug or medicine prescribed, the prescription expired typically six (6) months or one (1) after the date of issue. Each state also determines who is allowed to prescribe medicines and drugs. As an example, only a person who has earned the following credentials may prescribe drugs in the state of Texas; a MD, a DO, a DPM or a DDS. A DVM can also prescribe drugs in the state of Texas, but rarely are animal expenses considered an eligible FSA or HRA item.
Taxsaver Plan will place your prescription on file in our system based on the information provided by your physician. Although it is not required, it is helpful to please submit your prescription at the same time you purchase your over the counter drug or medicine. Taxsaver Plan will accept multiple prescriptions submitted at one time and will also record a prescription without the actual item being purchased.
As of January 1, 2011, the FSA or HRA Debit Cards will no longer be able to be used to pay for an over the counter drug or medicine, even if you have obtained the required prescription. FSA and HRA Debit Cards can be used to purchase behind the counter prescriptions and online prescriptions, as always.
For a list of over the counter expenses that are eligible without prescription, please click on the link at the top of this page, titled Eligible Expenses.
For a list of over the counter expenses that require a prescription, please click on the link at the top, titled Prescription Required Items.
For a list of over the counter expenses that require a Medical Determination Form (which can be found on our Forms page), please click on the link on the top of this page, titled Dual Expenses.
And, for a list of over the counter expenses that are never eligible for reimbursement, please cick on the link at the top of this page, titled Ineligible Expenses.
Please note that stockpiling of OTC items is not allowed per IRS Regulations. For administrative purposes, thismeans that any requests for reimbursement exceeding 5 of the same item purchased in the same week will be denied.This includes Eligible Expenses, Prescription Required Items, and Dual Purpose expenses.
Oxygen Equipment You can include amounts you pay for oxygen and oxygen equipment to relieve breathing problems caused by a medical condition.
Seeing-eye Dog You can include the cost of a guide dog, or animal, to be used by a vision-impaired or hearing-impaired person. You can also include the cost of care for these trained animals.
Expenses Eligible for Reimbursement
Revenue Ruling 99-28 which provides for the deductibility of smoking- cessation programs and for prescribed drugs designed to alleviate nicotine withdrawal, will be published in the Internal Revenue Bulletin 1999-25 dated June 21, 1999. The IRS has stated that “nicotine is addictive and that smoking is detrimental to the health of the smoker.”
Accordingly, the cost for smoking-cessation programs, as well as for prescribed drugs used to alleviate the effects of nicotine withdrawal, are deductible under Section 213 of the IRC. As of January 1, 2011, over-the-counter medications, such as non-prescription nicotine patches and gum, will require a prescription for a licensed physician in order to be considered for reimbursement.
Any smoking-cessation program is acceptable as long as there is a nexus between the expense and the addiction. Thus, hypnosis would be acceptable, but playing tennis would not. A letter from the doctor is not necessary, but the receipt from the hypnotist would need to show that the treatment was for the purpose of smoking cessation.
Special EducationYou can include in medical expense payments to a special school for a mentally impaired or physically disabled person if the main reason for using the school is its resources for relieving the disability. You can include, for example, the cost of: *Teaching Braille to a visually impaired child. *Teaching lip reading to a hearing impaired child. *Giving remedial language training to correct a condition caused by a birth defect. The cost of meals, lodging and ordinary education supplied by a special school can be included in medical expenses only if the main reason for the child’s being there is the resources the school has for relieving the mental or physical disability. YOU CANNOT INCLUDE IN MEDICAL EXPENSES THE COST OF SENDING A CHILD TO A SPECIAL SCHOOL FOR BENEFITS THE CHILD MAY GET FROM THE COURSE OF STUDY AND THE DISCIPLINARY METHODS. Tuition costs for a school for children with ADD, for example, is not reimbursable. However, additional costs for therapy sessions or classes at school that treat the ADD will be reimbursable as long as the costs can be itemized separately from the cost of the tuition.
You can include the cost of syringes purchased for the purpose of self-injecting insulin or allergy serums.
Weight Loss Programs
Weight Loss Programs You can include the costs of weight loss programs if it is prescribed by a physician, for the specific treatment of a medical condition or disease and for a specific length of treatment time. You cannot, however, participate in a weight loss program for your general health, even if your physician prescribes it. You may NOT include the cost of special foods as a substitute for normal food, unless:
- The food does not satisfy normal nutritional needs,
- The food alleviates or treats an illness, AND
- The need for the food is substantiated by a physician.