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.
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