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The IRS released FAQs which provide guidance on whether certain expenses related to wellness, general health, and nutrition are medical expenses that can be paid or reimbursed by a health reimbursement account (HRA), health savings account (HSA), or a health flexible spending account (FSA).
Only expenses that qualify for medical care under IRS Code Section 213 are eligible to be paid or reimbursed under an HSA, HRA, or FSA. Eligible expenses include things like physical exams, dental exams, and eye exams. Other expenses related to weight-loss programs, therapy, and nutritional counseling, etc. are only eligible in certain situations.
Eligible / Noneligible Expenses
| Type of Expense | Eligible Expense for HRA, Health FSA, or HRA? |
|
Dental exam |
Yes, because the exam provides a diagnosis of whether a disease or illness is present. |
| Eye exam | |
| Physical exam | |
| Drug abuse treatment program | Yes, because the program treats a disease (substance use disorder, alcohol use disorder or tobacco use disorder). |
| Alcohol abuse treatment program | |
| Smoking cessation program | |
| Therapy | Yes, if the therapy is a treatment for a disease. For example, an amount paid for therapy to treat a diagnosed mental illness is a medical expense, but an amount paid for marital counseling is not. |
| Nutritional counseling | Yes, but only if nutritional counseling treats a specific disease diagnosed by a physician (such as obesity or diabetes). Otherwise, the cost of nutritional counseling is not a medical expense. |
| Weight-loss program | Yes, but only if the program treats a specific disease diagnosed by a physician (such as obesity, diabetes, hypertension or heart disease). Otherwise, the cost of a weight- loss program is not a medical expense. |
| Gym membership | Yes, but only if the membership was purchased for the sole purpose of affecting a structure or function of the body (such as a prescribed plan for physical therapy to treat an injury) or the sole purpose of treating a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). Otherwise, the cost of a gym membership is for the general health of the individual and is not a medical expense. |
| Exercise for improvement of general health (for example, swimming or dance lessons) | No, because the exercise, even if recommended by a doctor, is only for the improvement of general health. |
| Food or beverages purchased for weight loss or other health reasons |
Yes, but only if:
|
| Nonprescription (over-the-count) drugs and medicines | Yes, the cost of over-the-counter drugs may be paid or reimbursed by an HSA, health FSA, or HRA. |
| Nutritional supplements | Yes, but only if the supplements are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, the cost of nutritional supplements is not a medical expense. |
The IRS released these FAQs as part of the federal government’s National Strategy on Hunger, Nutrition, and Health. Although this isn’t new guidance, they are good reminders for what expenses can be reimbursed by an HSA, health FSA, or HRA. Employers with health FSAs or HRAs should review their plan design to ensure that only medical expenses are eligible to be paid or reimbursed. Download the bulletin for more details.
National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.
