The IRS recently released a list of frequently asked questions (FAQs) regarding what expenses can be paid or reimbursed by a health savings account (HSA), health flexible spending account (FSA), or health reimbursement account (HRA). Typically, under Internal Revenue Code Section 213, expenses that qualify as medical care are eligible to be paid or reimbursed by an HSA, health FSA, or HRA.
The released FAQ confirms that costs for dental exams, eye exams, physical exams, programs to treat substance use or alcohol use disorders, and smoking cessation programs are considered medical expenses. Additionally, the IRS addresses the circumstances allowing the costs of therapy, nutritional counseling, weight-loss programs, gym memberships, and more to be considered eligible expenses.
Eligible expenses for an HSA, health FSA, or HRA:
- Dental, eye, and physical exams – eligible because the exam determines if an illness or disease is present.
- Drug abuse, alcohol abuse, and smoking cessation programs – eligible because each treats a disease.
- Nonprescription drugs and medicines – eligible to be paid for or reimbursed.
Conditional eligible expenses for an HSA, health FSA, or HRA:
- Therapy – eligible only if the therapy is used to treat a disease, like a diagnosed mental illness.
- Nutritional counseling and supplements – eligible only if used to treat a disease, like diabetes or obesity, diagnosed by a physician.
- Weight-loss program – eligible only if used to treat a diagnosed disease (i.e., diabetes, obesity, hypertension, or heart disease).
- Gym membership – eligible only if purchased to support a prescribed plan for physical therapy or to treat a diagnosed disease.
- Food or drinks purchased for health or weight-loss reasons – eligible only if they do not satisfy normal nutritional needs; they alleviate or treat an illness, and they are substantiated by a physician. All three requirements must be met in order to be considered a medical expense.
Not an eligible expense for an HSA, health FSA, or HRA:
- Exercise to boost general health (i.e., dance lessons or swimming) – not eligible even if recommended by a doctor.
If you have any questions regarding your HSA, health FSA, or HRA, please contact your dedicated Creative Benefits, Inc. team member.