- Medical Expenses – Health Care FSA, HRA and HSA
- Over-the-Counter Expenses - Health Care FSA, HRA and HSA
- Dependent Care Expenses – Dependent Care FSA only
The list below outlines medical expenses the IRS typically considers eligible for tax deduction. These expenses can be reimbursed through your health care flexible spending account (FSA), health reimbursement arrangement (HRA) or health savings account (HSA).
To be eligible, medical expenses must be medically necessary. The IRS defines an eligible medical expenses as one incurred primarily to alleviate or prevent physical or mental defect or illness. This includes the costs of equipment, supplies, and diagnostic devices, as well as dental expenses, some insurance premiums and transportation costs. This does not include expenses that are merely beneficial to general health, such as vitamins or a vacation.
This is not an all inclusive list. Some health care expenses you incur may not be eligible for reimbursement. For a complete list, see IRS Publication 502 on irs.gov.
Eligible Medical Expenses
The new Health Care Reform Bill, the Patient Protection and Affordable Care Act (PPACA), imposes new restrictions on FSAs. Effective January 1, 2011, certain over-the-counter (OTC) drugs and medicines will require a Note of Medical Necessity (NMN) or a prescription from a doctor to be considered an eligible expense.Beginning January 1, 2011
- Over-the-counter (OTC) drugs and medicines will be considered ineligible expenses unless you have a Note of Medical Necessity (NMN) or a prescription from your physician.
- Healthcare debit cards cannot be used to purchase OTC drugs and medicines. If a healthcare debit card is used to pay for these items after January 1, 2011, the transaction will be denied at the point of sale. In this case, you will need to pay for the expense out-of-pocket and submit a claim, along with an NMN or a prescription, to be reimbursed.
Examples of OTC Drugs and Medicines Requiring a Prescription
Please note that this listing is subject to change at any time and without notice due to new legislation.
Certain Medical Equipment and Supplies are eligible OTC expenses that do not require an NMN:
Dual-Purpose OTC Items
The following OTC drugs and other expenses, when medically necessary, are reimbursable with a receipt.
NOTE: A Medical Determination Form completed by your health care provider listing the diagnosis of your medical condition and the recommendation of the OTC drug is required for reimbursement.
Dual-Purpose OTC Items
|Anti-baldness / hair loss / hair replacement such as Rogaine||Only if to replace hair loss due to a medical condition (e.g., cancer treatment) and not for balding due to age|
|Fiber supplements||Such as Benefiber and Metamucil|
|Glucosamine / Chondrotin for arthritis or other medical condition||Not reimbursable if taken for overall joint health|
|Herbal supplements used to treat a specific disease||Such as St. John’s Wort for depression|
|Hormone therapy drugs|
|Medicated shampoos to treat a specific medical condition like psoriasis||Only the amount in excess of the cost of normal shampoo|
|No Doz||And other sleep prevention drugs|
|Nose strips||For proper breathing or other medical conditions|
|Pedialyte||For a child's dehydration|
|Retin-A and other acne medicines||Not reimbursable if used for cosmetic purposes such as wrinkle reduction|
|Snoring cessation aids and medications||Such as Breathe Right Spray and Snorezz|
|Sunscreen and sunblock|
|Vitamins are not an eligible expense, unless prescribed by a physician to treat a specific medical condition||For example, iron to treat, not prevent, anemia; calcium supplements to treat, not prevent, osteoporosis ― a doctor’s note detailing the specific medical condition will be required for reimbursement|
|Weight loss/dietary supplements||Must be for a specific medical condition such as obesity|
To be eligible for reimbursement, dependent care expenses must be for an eligible dependent and for care that allows the FSA participant to work or look for work. The expenses listed below are typically considered eligible by the IRS. These expenses can be reimbursed through your dependent care FSA. For a complete listing, see IRS Publication 503 on irs.gov.
Child care provided by a baby sitter, day care facility or before or after school program, as well as summer day camp, are eligible. Extracurricular activities such as dance or piano lessons are not eligible.
Child Care Expenses
|After school programs|
|Babysitting (someone else's home)|
|Babysitting (your home)|
|Before school programs|
|Sick child care|
|Summer day camp|
Senior care provided by a sitter or a day care facility is eligible if the senior is considered an eligible adult. See Eligible Dependent. Medical care, nursing care and transportation costs are not eligible.
Senior Care Expenses
|Adult day care|
|Elder care (in your home)|
|Elder care (outside your home)|
|Senior day care|
Non-Reimbursable Dependent Care Expenses
The following expenses are not reimbursable through a dependent care FSA.