Asked and Answered: Are my funds eligible to use in Puerto Rico?
On paper it makes perfect sense. The Commonwealth of Puerto Rico is a territory of the United States, which should mean the usual range of products and services are FSA-eligible. But, while Puerto Rico offers some flexibility to American visitors who need medical care, it operates on its own health insurance system, independent of U.S. networks.
In other words, if you're traveling to Puerto Rico for a few weeks, your U.S. health insurance plan should continue to cover you. But if you're planning a longer stay -- maybe an extended work trip -- you're probably going to have to get local medical coverage to ensure you're not left with a huge out-of-network bill after you return.
If you're planning an extended trip, this might not be a bad thing. Puerto Rico currently provides universal health care access to 1.7 million people through its $2.3 billion Mi Salud program, of which 55% is funded through Medicaid. And compared to U.S. insurance prices, Puerto Rico's health insurance can sometimes cost half as much, while covering more.
But if you're not planning to be there long, you need to be more careful with your health spending. And this means your FSA funds won't be treated the same way, either. For the purposes of FSA eligibility it falls under the rules that apply to foreign countries, since Puerto Rico is a self-governing territory with its own Internal Revenue Code. And that means IRS Publication 969 -- which oversees FSA tax plans -- doesn't apply.
So, that's it?
We wouldn't leave you hanging like that. Just because Puerto Rico has its own health care system, it doesn't mean your expenses aren't eligible. It just means you need to follow the rules defined for foreign travel.
Expenses fall under the same rules that are in effect in U.S. with covered medical care including dental, vision and preventative treatment.
To be eligible, any treatment must be legal both in Puerto Rico as well as in the U.S. Prescription medicine that's legal in both Puerto Rico and the U.S. and is used in Puerto Rico is also eligible. But, medicines bought in Puerto Rico and brought back or shipped to the United States are not eligible.
For example, if you're visiting Puerto Rico and require medical care or a doctor's visit because you twisted an ankle dancing at a beach bar, the FSA eligibility rules would be the same as if the injury happened in the U.S. Your doctor's visit would be covered and any prescription pain or other medication would also be eligible.
But that sounds like everything's eligible
Not so fast. One difference would be you wouldn't be able to bring that prescription medication back to the U.S. but would have to use all of it in Puerto Rico for it to be FSA-eligible.
If for some reason the doctor in Puerto Rico provided an experimental ankle treatment that's not offered in the U.S., or used a prescription drug that isn't legal in the U.S., neither of those treatment options would be covered by your FSA.
Your FSA plan administrator may have specific rules governing your plan that could impact which expenses will qualify. If you'll be traveling soon, speak with your administrator before heading out of town to see if there's anything else you should know.
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