EDIT: In March 2021, the IRS released Announcement 2021-7, establishing that “personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of the Coronavirus Disease 2019 (COVID-19 PPE) are treated as amounts paid for medical care under § 213(d) of the Internal Revenue Code (Code).”
FSAs are one of the most popular pre-tax benefits in United States. In 2019, more than 68% of employees had enrolled in the account*. Given this fact, it may come as a surprise that there are limits on what can be purchased through an FSA.
While certain spending avenues were opened after reform healthcare reform was released in 2020 due to the coronavirus pandemic, there are still certain items that you should not purchase with your FSA.
EDIT: Good news!
We’ll start with the most obvious and perhaps most frustrating item: masks. This has been a point of confusion for many consumers, given that the CDC directly recommends masks.
However, while a petition has been started to make masks eligible, they currently are regarded as an ineligible item. We discuss this further in our blog “Why aren’t masks and PPE items eligible expenses?” Due to this fact, they cannot be purchased as an over the counter item using an FSA card.
If you’ve ever tried using your FSA card to buy multivitamins, you know it doesn’t work.
Many people take vitamins and supplements for general daily health. However, simply purchasing vitamins over the counter is not an eligible expense. If your doctor has prescribed you specific supplements, you will need to fill out a letter of medical necessity (LMN) in order to use your FSA to make this purchase. Otherwise, vitamins and supplements are not considered an eligible expense and your card will be rejected.
But why? Vitamins are directly tied to health, right? Well, yes. But, because of how the IRS determines eligibility, they are considered a dual purpose item. In short, you will always need a doctor’s note to buy them, and then you’ll need to submit a claim.
3. Weight loss items
Finally, if you sign up for a weight loss program and there are items you need to purchase to support your health journey, you cannot use your FSA card without having an LMN to back up your purchase. This includes scales, weight loss program costs, and supporting material such as training videos or online coaches.
If you are a participant whose benefits are pre-tax benefits are administered by BRI, you can have your doctor fill out an LMN (which you can download for free here). Otherwise, it is best to not use your FSA funds for weight loss.
How do I know what’s eligible?
If you are a user with Benefit Resource, you can view the Eligible Expenses Table through your online account. The list contains a breakdown of items by category and their eligibility status. Just log in to BRiWeb and view the Eligible Expenses Table in Documents.