Sarah Borders, CEBS April 1, 2024 3 min read

IRS Issues Alert on Wellness Expense Reimbursements

The IRS has released an alert confirming that personal expenses for general wellness and nutrition may not be paid for or reimbursed through a tax-advantaged FSA, HRA, or HSA.

Who this applies to:

  • Employers offering health FSAs, HRAs or HSAs

Go Deeper:

These types of arrangements (FSA, HRA, HSA) may only reimburse expenses for medical care as defined under IRS Code 213d. Medical care expenses are defined as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or function of the body. Medical expenses do not include amounts paid for products that are simply healthy or nutritional.

The alert provides an example of a diabetic who tries to be reimbursed through an FSA for foods low in carbohydrates as long as he has a doctor’s note. It confirms that such expenses should be denied by administrators because food is not a medical expense and to allow reimbursement would disqualify the entire FSA plan.

Employers, administrators, and taxpayers with questions are encouraged to review the frequently asked questions on medical expenses related to nutrition, wellness, and general health to determine whether a food or wellness expense is indeed a medical expense eligible for pre-tax payments through an FSA, HRA, or HSA.


Sarah Borders, CEBS

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.