Car Modifications: FSA Eligibility

Car Modifications: requires a Letter of Medical Necessity (LMN) to be eligible with a Flexible Savings Account (FSA)
Car modifications for health reasons may be eligible with a Letter of Medical Necessity (LMN) for reimbursement through a flexible spending account (FSA), health savings account (HSA) or a health reimbursement arrangement (HRA). Car modifications reimbursement is not eligible with a limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA).

What are car modifications?

Medical car modifications, also known as automobile adaptive equipment (AAE), are a series of improvements made to an existing vehicle that allows individuals who have suffered traumatic injuries or a physical/mental disability to enter, exit and/or operate an existing vehicle. While these expenses are covered with a Letter of Medical Necessity (LMN) from a doctor, the cost of operating the vehicle afterward is not covered, as well as the expense of a specially designed car to hold a wheelchair may be reimbursed only to the extent the cost of the special car exceeds the cost of a regular car (National Highway Traffic Safety Administration).

How are car modifications installed?

Before visiting the doctor's office, patients who are looking to install medical car modifications should first visit a driver rehabilitation specialist to have him/her perform a comprehensive evaluation to find the adaptive equipment to serve the driver's needs. Because these specialists must weigh a series of important factors, such as flexibility/range of motion, coordination and reaction time, decision-making abilities and the person's overall ability to drive with the new equipment, this is a key step in determining what upgrades will be needed.

Before visiting a driver rehabilitation specialist, individuals should inquire with their insurance companies or benefits administrators to see whether the carriers would rather perform the evaluation, or if a prescription or other documentation will be required.

What are the most common medical car modifications?

While medical automobile modifications vary greatly based on an individual's disability or specific medical condition, there are a number of standard modifications that can improve an individual's mobility and overall quality of life. These include:

  • Zero effort steering and braking
  • Digital driving systems
  • Lowered floors/raised roofs
  • Power door openers
  • Wheelchair lifts
  • Hand Controls
  • Left foot gas pedals

How do I obtain a Letter of Medical Necessity (LMN) for car modifications?

In most cases, car modifications for medical reasons require further substantiation from a doctor in the form of a Letter of Medical Necessity (LMN). This letter must outline how the account holder's medical condition necessitates the installation of car modifications to allow the safe, comfortable operation of the vehicle by the account holder, as long as it does not increase the value of the vehicle. If additional car modifications will be needed outside of the current plan year, another LMN will need to be submitted for future reimbursement.