Medical Equipment: FSA Eligibility

Medical Equipment: eligible with a Flexible Savings Account (FSA)
Medical equipment is eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA) and a health reimbursement arrangement (HRA). Medical equipment reimbursement is not eligible with a limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA).

What is medical equipment?

Medical equipment encompasses a huge range of items designed to be used by account holders to treat a medical condition or monitor its status. Under IRC 213(d)(1), "medical care includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body." This includes medical equipment, supplies and devices. As such, consumer-directed account holders can be fully reimbursed for the purchase of medical equipment with their employee benefits.

The IRS regulation is an important distinction to keep in mind when referring to a piece of medical equipment's eligibility with consumer-directed healthcare accounts. For instance, items such as diagnostic products (blood pressure monitors, defibrillators, thermometers, etc.) adaptive equipment (grab bars, shower chairs, etc.) first aid supplies (kits, bandages, antiseptics) are directly related to the care and prevention of legitimate medical conditions.

However, some equipment may have a cursory medical application, but the IRS has ruled that these are only necessary for "general health." These products include items like electric toothbrushes, pedometers, fitness tracking devices and more. While these products do have the ability to promote a healthier lifestyle and could play a role in preventing some medical conditions, the IRS has ruled that they are solely for "general health" purposes unless prescribed by a physician for a specific medical ailment. For more information about eligibility through a consumer-directed healthcare account, consult your benefits administrator.