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Health Care FSA Eligible Expenses The primary source of this information is IRS Publication 502, however, it has been paraphrased and/or modified to provide information specific to Health Care Flexible Spending Accounts. The primary differences between the rules outlined in Publication 502 and the regulations governing Health Care Flexible Spending Accounts are: The titles and content of this page is offered for general information only. Please consult a qualified tax advisor for specific information. What Is the Definition of Medical Care?
Medical care means amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of
disease, and for treatments affecting any part or function of the body. The medical care expenses
must be primarily to alleviate or prevent a physical or mental defect or illness. Medical care
expenses include the amounts you pay for transportation to get medical care.
When is an expense eligible for reimbursement?
Expenses are eligible for reimbursement if they were incurred during the period when the participant
(or the qualified dependent) was covered under the plan. Expenses are incurred when services are
rendered, regardless of when the expense is paid.
For whom are expenses eligible?
The Health Care Flexible Spending Account covers the following "medical" expenses, for the participant
and qualified dependents .
Click on a link below to go to that section Abortion Acupuncture Alcoholism Ambulance Artificial Limb Artificial Teeth (Ineligible) Baby Sitting, Child Care, and Nursing Services for a Normal, Healthy Baby Birth Control Pills Braille Books and Magazines Capital Expenses Chiropractor Christian Science Practitioners Contact Lenses (Ineligible) Controlled Substances (Ineligible) Cosmetic Surgery Crutches (Ineligible) Dancing/Swimming Lessons (Ineligible) Diaper Service Dental Treatment Drug Addiction Drugs (Ineligible) Electrolysis or Hair Removal Eyeglasses Fertility Enhancement Guide Dog or Other Animal (Ineligible) Hair Transplant (Sometimes Eligible) Health Club Dues Health Institute Hearing Aids Hospital Services (Ineligible) Household Help (Ineligible) Illegal Operations and Treatments (Ineligible) Insurance Premiums Laboratory Fees Lead-Based Paint Removal Learning Disability Legal Fees Lodging Long Term Care (Ineligible) Maternity Clothes Meals Medical Services Medicines Mentally Retarded, Special Home for (Ineligible) Nonprescription Drugs and Medicines Nursing Home Nursing Services (Ineligible) Nutritional Supplements Operations Optometrist Organ Donors Osteopath Over-the-counter Drugs Oxygen (Ineligible) Personal Use Items Prosthesis Psychiatric Care Psychoanalysis Psychologist Schools and Education, Special Sterilization Stop-Smoking Programs Surgery Telephone Television Therapy Transplants Transportation Trips Vasectomy (Sometimes Eligible) Weight Loss Program Wheelchair Therapy Transplants Transportation Trips Vasectomy X-ray Fees
Abortion
You may be reimbursed for the amount you pay
for a legal abortion.
You may be reimbursed for the amount you pay
for acupuncture.
You may be reimbursed for 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 can also include in medical expenses transportation costs you pay to attend meetings of an Alcoholics Anonymous Club in your community if your attendance is pursuant to medical advice that membership in the Alcoholics Anonymous Club is necessary for the treatment of a disease involving the excessive use of alcoholic liquors.
You may be reimbursed for amounts you pay for
ambulance service.
You may be reimbursed for the amount you pay for an artificial limb.
You may be reimbursed for the amount you pay for artificial teeth.
(Ineligible) Baby Sitting, Child Care, and Nursing Services for a Normal, Healthy Baby
You may not be reimbursed for amounts you pay for the care of your children even if the expenses enable you to get medical or dental treatment. Also, any expense allowed as a child care credit cannot be treated as an expense paid for medical care. See also Healthy baby under Nursing Services, earlier.
You may be reimbursed for the amount you pay for birth control pills prescribed by a doctor.
You may be reimbursed for the part of the cost of Braille books and magazines for use by a visually-impaired person that is more than the cost of regular printed editions.
You may be reimbursed for 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 a 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.
You may be reimbursed for the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability. You may be reimbursed for the difference in the cost of a car specially designed to hold a wheelchair and a regular car.
You may be reimbursed for fees you pay to a chiropractor for medical care.
Christian Science Practitioners
You may be reimbursed for fees you pay to Christian Science practitioners for medical care.
You may be reimbursed for amounts you pay for contact lenses needed for medical reasons. You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner. See Eyeglasses and Laser Eye Surgery, later.
(Ineligible) Controlled Substances
You may not be reimbursed for amounts you pay for controlled substances (such as marijuana, laetrile, etc.), in violation of federal law.
Generally, You may not be reimbursed for the amount you pay for unnecessary cosmetic surgery. This applies to any procedure that is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. Procedures such as face lifts, hair transplants, hair removal (electrolysis), and liposuction generally are not deductible.
You may be reimbursed for the amount you pay for cosmetic surgery if it is necessary to improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.
You may be reimbursed for the amount you pay to buy or rent crutches.
(Ineligible) Dancing/Swimming Lessons
You cannot include the cost of dancing lessons, swimming lessons, etc., even if they are recommended by a doctor, if they are only for the improvement of general health.
You may be reimbursed for the amounts you pay for dental treatment. This includes fees paid to dentists for X-rays, fillings, braces, extractions, dentures, etc.
You may not be reimbursed for the amount vou pay for diapers or diaper services, unless they are needed to relieve the effects of a particular disease.
You may be reimbursed for amounts you pay for an inpatient's treatment at a therapeutic center for drug addiction. This includes meals and lodging at the center during treatment.
See Medicines, later.
(Ineligible) Electrolysis or Hair Removal
See Cosmetic Surgery, earlier.
You may be reimbursed for amounts you pay for eyeglasses and contact lenses needed for medical reasons. You can also include fees paid for eye examinations.
You may be reimbursed for the cost of the following procedures to overcome your inability to have children. This includes procedures such as in vitro fertilization (including temporary storage of eggs or sperm) as well as surgery, including an operation to reverse prior surgery that prevents you from having children.
You may be reimbursed for the cost of a guide dog or other animal to be used by a visually-impaired or hearing-impaired person. You can also include the cost of a dog or other animal trained to assist persons with other physical disabilities. Amounts you pay for the care of these specially trained animals are also medical expenses.
See Cosmetic Surgery, earlier.
(Sometimes Eligible) Health Club Dues
You may not be reimbursed for health club dues, YMCA dues, or amounts paid for steam baths for your
general health or to relieve physical or mental discomfort not related to a particular medical
condition. You may not be reimbursed for the cost of membership in any club organized for business,
pleasure. recreation, or other social purpose. You may be reimbursed only if the services of a
health club are prescribed by a physician for treatment of a specific medical condition.
You may be reimbursed for fees you pay for treatment at a health institute only if the treatment is prescribed by a physician and the physician issues a statement that the treatment is necessary to alleviate a physical or mental defect or illness of the individual receiving the treatment.
You may be reimbursed for the cost of a hearing aid and the batteries you buy to operate it.
You may be reimbursed for amounts you pay for the cost of inpatient care at a hospital or similar institution if the main reason for being there is to receive medical care. This includes amounts paid for meals and lodging. Also see Lodging, later.
You may not be reimbursed for the cost of household help, even if such help is recommended by a doctor. This is a personal expense that is not deductible. However, you may be able to include certain expenses paid to a person providing nursing-type services. Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses.
(Ineligible) Illegal Operations and Treatments
You may not be reimbursed for amounts you pay for illegal operations, treatments, or controlled substances whether rendered or prescribed by licensed or unlicensed practitioners.
(Ineligible) Insurance Premiums
You may not be reimbursed for insurance premiums unless such coverage is sponsored by the employer, and then only if the premiums are not already deducted from the employee's paycheck on a tax-free basis. Generally, the only premiums that qualify are for the continuation of medical insurance for dependents under COBRA.
You may be reimbursed for the amounts you pay for laboratory fees that are part of your medical care.
You may be reimbursed for the amount you pay for surgery to improve vision, such as radial keratotomy or other laser eye surgery, if it is done primarily to promote the correct function of the eye.
You may be reimbursed for the cost of removing lead-based paints from surfaces in your home to prevent a child who has or has had lead poisoning from eating the paint. These surfaces must be in poor repair (peeling or cracking) or within the child's reach. The cost of repainting the scraped area is not a medical expense.
If, instead of removing the paint, you cover the area with wallboard or paneling, treat these items as capital expenses. See Capital Expenses, earlier. Do not include the cost of painting the wallboard as a medical expense.
You may be reimbursed for tuition fees you pay to a special school for a child who has severe learning disabilities caused by mental or physical impairments, including nervous system disorders. Your doctor must recommend that the child attend the school. See Schools and Education, Special, later.
You can also include tutoring fees you pay on your doctor's recommendation for the child's tutoring by a teacher who is specially trained and qualified to work with children who have severe learning disabilities.
You may be reimbursed for legal fees you paid that are necessary to authorize treatment for mental illness. However, You may not be reimbursed for fees for the management of a guardianship estate, fees for conducting the affairs of the person being treated, or other fees that are not necessary for medical care.
Qualified long-term care services are:
Chronically ill individual. You are chronically ill if you have been certified by a licensed health care practitioner within the previous 12 months as one of the following.
1 ) You are unable for at least 90 days, to perform at least two activities of daily living without substantial assistance from another individual, due to loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence.
2) You require substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.
(Ineligible) Maternity Clothes
You may not be reimbursed for amounts you pay for maternity clothes.
You may be reimbursed for the cost of meals at a hospital or similar institution if the main purpose for being there is to get medical care.
You may not be reimbursed for the cost of meals that are not part of inpatient care.
You may be reimbursed for amounts you pay for legal medical services provided by:
You may be reimbursed for amounts you pay for prescribed medicines and drugs. A prescribed drug is one that requires a prescription by a doctor for its use by an individual. You can also include amounts you pay for insulin. Except for insulin, You may not be reimbursed for amounts you pay for a drug that is not prescribed.
Controlled substances. You may not be reimbursed for amounts you pay for controlled substances (such as marijuana, laetrile, etc.), in violation of federal law.
Mentally Retarded, Special Home for
You may be reimbursed for the cost of keeping a mentally retarded person in a special home, not the home of a relative, on the recommendation of a psychiatrist to help the person adjust from life in a mental hospital to community living.
(Ineligible) Nonprescription Drugs and Medicines
Except for insulin, You may not be reimbursed for amounts you pay for a drug that is not prescribed.
You may be reimbursed for the cost of medical care in a nursing home or home for the aged for yourself, your spouse, or your dependents. This includes the cost of meals and lodging in the home if the main reason for being there is to get medical care.
Do not include the cost of meals and lodging if the reason for being in the home is personal. You can, however, include in medical expenses the part of the cost that is for medical or nursing care.
You may be reimbursed for wages and other amounts you pay for nursing services. Services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.
Generally, only the amount spent for nursing services is a medical expense. If the attendant also provides personal and household services, these amounts must be divided between the time spent performing household and personal services and the time spent for nursing services. However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. See Publication 503, Child and Dependent Care Expenses.
You can also include in medical expenses part of the amount you pay for that attendant's meals. Divide the food expense among the household members to find the cost of the attendant's food, Then apportion that cost in the same manner, as in the preceding paragraph. If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant.
Employment taxes. You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for a nurse, attendant, or other person who provides medical care. For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide.
Healthy baby. You cannot include the cost of nursing services for a normal, healthy baby. But you may be able to take a credit for child care expenses. See Publication 503 for more information. You also may be able to take the child tax credit. See the instructions in your tax package.
(Ineligible) Nutritional Supplements
You may not be reimbursed for the cost of nutritional supplements, vitamins, herbal supplements, "natural medicines", etc., unless you can only obtain them legally with a physician's prescription.
You may be reimbursed for amounts you pay for legal operations that are not for unnecessary cosmetic surgery.
See Eyeglasses, earlier.
See Transplants, later.
You may be reimbursed for amounts you pay to an osteopath for medical care.
You may be reimbursed for amounts you pay for over-the-counter drugs you purchase for
yourself or your qualified dependents for treatment of specific medical conditions.
Vitamins and other products you purchase for the general improvement of
health are not eligible.
You may be reimbursed for amounts you pay for oxygen and oxygen equipment to relieve breathing problems caused by a medical condition.
(Ineligible) Personal Use Items
You may not be reimbursed for an item ordinarily used for personal, living, or family purposes unless it is used primarily to prevent or alleviate a physical or mental defect or illness. For example, the cost of a wig purchased upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease can be included with medical expenses.
Where an item purchased in a special form primarily to alleviate a physical defect is one that in normal form is ordinarily used for personal, living, or family purposes, the excess of the cost of the special form over the cost of the normal form is a medical expense (see Braille Books and Magazines earlier).
See Artificial Limb, earlier.
You may be reimbursed for amounts you pay for Psychiatric care. This includes the cost of supporting a mentally ill dependent at a specially equipped medical center where the dependent receives medical care. See Psychoanalysis, next, and Transportation, later.
You may be reimbursed for payments for psychoanalysis. However, you cannot include payments for psychoanalysis that you must get as a part of your training to be a psychoanalyst.
You may be reimbursed for amounts you pay to a psychologist for medical care.
Schools and Education, Special
You may be reimbursed for 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:
<.li> Teaching Braille to a visually impaired child,
You may not be reimbursed for the cost of sending a problem child to a special school for benefits the child may get from the course of study and the disciplinary methods.
You may be reimbursed for the cost of a legal sterilization (a legally performed operation to make a person unable to have children).
You may be reimbursed for amounts you pay for a program to stop smoking. However, You may not be reimbursed for amounts you pay for drugs that do not require a prescription, such as nicotine gum or patches, that are designed to help stop smoking.
See Operations, earlier.
You may be reimbursed for the cost and repair of special telephone equipment that lets a hearing-impaired person communicate over a regular telephone.
You may be reimbursed for the cost of equipment that displays the audio part of television programs as subtitles for hearing-impaired persons. This may be the cost of an adapter that attaches to a regular set. It also may be the cost of a specially equipped television that exceeds the cost of the same model regular television set.
You may be reimbursed for amounts you pay for therapy you receive as medical treatment. You may be reimbursed for amounts you pay to an individual for giving "patterning" exercises to a mentally retarded child. These exercises consist mainly of coordinated physical manipulation of the child's arms and legs to imitate crawling and other normal movements.
You may be reimbursed for payments you make for surgical, hospital, laboratory, and transportation expenses for a donor or a possible donor of a kidney or other organ. You cannot include expenses if you did not pay for them. A donor or possible donor can include surgical, hospital, laboratory, and transportation expenses in medical expenses only if he or she pays for them.
You may be reimbursed for amounts paid for transportation primarily for, and essential to, medical care.
You can include:
You cannot include:
Car expenses. You can include out-of-pocket expenses for your car, such as gas and oil, when you use your car for medical reasons. You cannot include depreciation, insurance, general repair, or maintenance expenses. If you do not want to use your actual expenses, you can use a standard rate of 12 cents a mile for use of your car for medical reasons. You can also include the cost of parking fees and tolls. You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate.
Example. Bill drove 2,800 miles for medical reasons during the year. He spent $200 for gas, $5 for oil, and $50 for tolls and parking. He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction. He figures the actual expenses first. He adds the $200 for gas, the $5 for oil, and the $50 for tolls and parking for a total of $255. He then figures the standard mileage amount. He multiplies the 2,800 miles by 12 cents a mile for a total of $336. He then adds the $50 tolls and parking for a total of $386. Bill includes the $386 of car expenses with his other medical expenses for the year because the $386 is more than the $255 he figured using actual expenses.
You may be reimbursed for amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. You may be able to include up to $50 per night for lodging. See Lodging, earlier.
You may not be reimbursed for a trip or vacation taken merely for a change in environment, improvement of morale, or general improvement of health, even if you make the trip on the advice of a doctor.
You may be reimbursed for charges for medical care included in the tuition of a college or private school, if the charges are separately stated in the bill or given to you by the school. See Leaming Disability, earlier, and Schools and Education, Special, earlier.
You may be reimbursed for the amount you pay for a vasectomy.
(Sometimes Eligible)Weight Loss Program
You may be reimbursed for the cost of a weight-loss program undertaken at a phvsician's direction
to treat an existing disease (such as heart disease). But you cannot include the cost of a
weight-loss program if the purpose of the weight control is to maintain your general good health.
You may be reimbursed for amounts you pay for an autoette or a wheelchair used mainly for the relief of sickness or disability, and not just to provide transportation to and from work. The cost of operating and keeping up the wheelchair is also a medical expense.
You may be reimbursed for amounts you pay for X-rays that you get for medical reasons.
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