Appearance Improvements: FSA Eligibility
Why aren't appearance improvements eligible for reimbursement?
Appearance improvements, or cosmetic procedures, are known by the Internal Revenue Service (IRS) as any procedure that is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. Consumer spending accounts were designed to help people save money on eligible medical expenses to prevent or treat a specific medical condition, so cosmetic procedures that have no role in improving a person's long-term health prospects are typically never covered under any of these accounts.
However, there are rare cases when these types of procedures may be covered, which will require a Letter of Medical Necessity (LMN) from a doctor for full reimbursement. If the appearance improvement is necessary to improve a deformity due to a congenital abnormality, personal injury/trauma or disfiguring disease, the procedure may be eligible under a flexible spending account (FSA), health savings account (HSA) or health reimbursement arrangement (HRA).