Cosmetics: FSA Eligibility
Why aren't cosmetic eligible for reiumbursement?
In accordance with IRS regulations regarding taxable medical deductions, IRS 213(d) is especially relevant in regards to the eligibility of certain over-the-counter (OTC) products like cosmetics. Under IRC 213(d), medical care refers to:
"The term "medical care" means amounts paid for the diagnosis, cure, mitigation, treatment or prevention of a disease, or for the purpose of affecting any structure or function of the body."
This particular definition is vital in helping benefits administrators determine whether a specific medical procedure or OTC product is eligible for reimbursement through consumer-directed healthcare accounts like FSAs, HSAs and HRAs. Cosmetics have no role in medical care or use for "general health" purposes, and they are primarily manufactured and used by those wishing to improve their physical appearance. As such, cosmetics are not eligible for reimbursement through consumer-directed healthcare accounts.