Nutritional Supplements: FSA Eligibility

Nutritional supplements, with a Letter of Medical Necessity from a doctor, are eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), a health reimbursement arrangement (HRA). Nutritional supplements are not eligible with a dependent care flexible spending account (DCFSA) or a limited care flexible spending account (LCFSA).

What are nutritional supplements?

Nutritional supplements are typically not eligible, unless to treat a specific illness. The IRS observed that sometimes doctors will recommend meal replacements, nutritional supplements and special foods as substitutes for foods normally consumed by individuals. Even if the reason is obesity, which can be considered a disease, these items are not reimbursable because they are food substitutes and everyone needs to eat.

Depending on the patient's condition and medical needs, some nutritional supplements are eligible with a prescription from a doctor with a flexible spending account (FSA) or health savings account (HSA), but they may also be eligible for reimbursement with a Letter of Medical Necessity (LMN) with a flexible spending account (FSA), health savings account (HSA) and health reimbursement arrangement (HRA). Nutritional supplements are not eligible with a limited care flexible spending account (LCFSA) and a dependent care flexible spending account (DCFSA).

From the IRS Publication 502:

"You can't include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, "natural medicines," etc. unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, these items are taken to maintain your ordinary good health, and aren't for medical care."

What are nutritional supplements?

"Nutritional supplements" is an umbrella term for a wide range of meal replacements, vitamins and special foods that contain a nutritional ingredient meant to add further nutritional value to a patient's diet. These supplements can be found in numerous forms, including tablets, soft-gels, liquids, powders and capsules. Nutritional supplements might include any number of additions, including vitamins, minerals, herbs/botanicals, extracts, concentrates, amino acids and much more.

When are nutritional supplements eligible for reimbursement?

An important distinction to keep in mind about nutritional supplement eligibility is that these products are not designed to treat, diagnose, prevent or cure diseases, a classification that is essential in determining a product or service's eligibility with consumer-directed healthcare accounts. Conversely, nutritional supplements are designed to give patients the vital substances that the body needs to function properly, which could in turn help to reduce the likelihood of certain diseases.

As such, most nutritional supplements are not automatically covered by consumer-directed healthcare accounts, but in some cases they are eligible with a prescription from a doctor, such as melatonin supplements that are used to regulate sleep cycles. However, the vast majority of nutritional supplements will require a Letter of Medical Necessity (LMN) from a doctor for claim reimbursement. Speak with a benefits administrator for details about claim reimbursement and inquire with a doctor about a LMN to be fully reimbursed for supplements included in a medical treatment plan.

Eligibility Table

Flexible Spending Account (FSA) Limited Care FSA Dependent Care FSA Health Savings Account (HSA) Health Reimbursement Account (HRA)

Eligible

Eligible with Rx

Eligible with LMN

Not Eligible

Additional Information

The IRS observed that sometimes doctors will recommend meal replacements, nutritional supplements and special foods as substitutes for foods normally consumed by individuals. Even if the reason is obesity, which can be considered a disease, these items are not reimbursable because they are food substitutes and everyone needs to eat.

Specifically Not Covered

Not eligible without a prescription.

Legal Information / Regulations

Prescription Required. Information Letter (IL) 2009-0209; Notice 2010-59. Information Letter 2007-0037 RS Confirms FSA Rule on Nutritional Supplements and Meal Replacements (November 2007)

 


AZ-PROD-WEB02 11/19/2017 10:38:19 AM