Picture this: you’re at your local pharmacy filling your cart after receiving your benefits card in the mail. When you get to the register, your card doesn’t seem to want to swipe. WHAT?! Angrily, you step aside and call your benefits provider to give them a piece of your mind. Apparently, according to the person you reached, the items in your cart are actually ineligible medical expenses.
What does that mean? Is this benefits provider trying to rip you off and take all of your money by not allowing you to purchase anything with your pre-tax health dollars?
Before you ready your pitchforks, let us explain.
What’s eligible and what isn’t is determined by the IRS, not your benefits provider. Specifically, by Section 213(d) of the Internal Revenue Code. This ruling considers items purchased “for the diagnosis, cure, mitigation, treatment, or prevention of disease…” to be eligible, in addition to some other situations we won’t get into. You can read IRC 213(d) here to get the full picture, as well as IRS Publication 502.
Fortunately, the IRS considers quite a few expenses eligible based on this definition. If you wanted a good cheat sheet on what is eligible, download this. But today we’re not here to talk about those items. We’re here to talk about the ineligible expenses.
Common Ineligible Medical Expenses, and Why They Aren’t Eligible
1. Dental Care Items
Items like dental floss, mouthwash, toothbrushes, and toothpaste should be eligible, right? Wrong, according to the IRS. The IRS considers these items “general health” items that help you maintain a healthy set of pearly whites. Therefore, they’re considered an ineligible expense.
So, what is? Here are some oral care items/services that are eligible:
- Denture/Retainer cleaners
- Dental services and procedures
- Fluoridation services
When the modern electronic Cigarette hit the US market, it was touted by many as a way to quit smoking. While you may still hear the anecdotal remark here and there from someone who successfully used them this way, research shows that odds of quitting smoking are actually lower amongst those who use e-cigarettes compared to those who didn’t. The World Health Organization stands by this assertion that it shouldn’t be a recommended smoking cessation tool. And since the health risks are still uncertain, the consensus is that they are ineligible for reimbursement.
Fortunately, there are other smoking cessation solutions that ARE eligible:
- Appointments with your doctor about how to quit
- Nicotine gum, patches, and lozenges (both prescription and OTC)
- Face-to-face support group sessions/programs
3. Weight Loss
Bad news if you’re trying to lose some of that quarantine weight you put on: what you’d purchase probably isn’t eligible under a pre-tax health account. Things like healthy foods, health club memberships, workout supplies, and gyms are considered ineligible. However, weight-loss programs used for treating a specific disease (e.g., heart disease, obesity) as diagnosed by a physician ARE eligible if you have a Letter of Medical Necessity.
Good News – Things CAN Change
In the past, the IRS has expanded the list of eligible items. Notably, the CARES Act made mensural products eligible, as well as OTC drugs & medicines eligible without a prescription. And most recently, Announcement 2021-7 declared PPE (such as masks, hand sanitizer, and sanitizing wipes) purchased after 1/1/20 “for the primary purpose of preventing the spread of the Coronavirus Disease 2019 (COVID-19 PPE)” to be eligible.
And don’t worry, there’s still plenty that IS eligible. If your pre-tax health account is provided by Benefit Resource, you can download the BRiMobile app and take advantage of our Eligible Item Scanner.