Note changes for 2020 Additional OTC items now reimbursable.
Health FSA reimbursement options:
Qualifying health care expenses
Qualifying health care expenses are those that are incurred by the employee, the employee's spouse, or the employee's qualifying child or qualifying relative during the plan year for medical care (as defined in Section 213(d) of the Internal Revenue Code), excluding all insurance premiums and long-term care expenses. Only the portion of the expenses you owe after insurance payments can be claimed. See maximum annual health care expense claim limits.
Qualifying health care expenses include amounts incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness.
Expenses qualify for the medical FSA based on when they are incurred, not when paid.
IRS Rules for OTC Medications
FSA only reimburses expenses of over-the-counter (OTC) drugs, medicines or biologicals (Additional OTC items now reimbursable). Equipment, supplies and diagnostic devices such as bandages, hearing aid batteries, and blood sugar test kits will remain eligible for reimbursement without a prescription.
Though the specific list of items affected has not been completely assessed, the following categories of items do not require a doctor’s prescription Additional OTC items now reimbursable:
IRS Rules for Coverage of Your Child's Medical Expenses
You may claim eligible medical expenses for your child through the end of the calendar year in which they reach 26. Your child may be a son, daughter, adopted child, stepchild, or eligible foster child. Children no longer have to be tax dependents in order for you to be reimbursed for their medical expenses.
Eligible expenses include (Additional OTC items now reimbursable):
A participant who pays in a lump sum may claim the amount at once. Previously, participants were required to claim monthly payments. Claims may be made for a lump sum of the entire amount of the participant's liability (up to the annual limit). To be reimbursed for orthodontia, the following criteria must be met:
Call ASI at 800-659-3035 if you have questions about making a claim for orthodontia.
Ineligible health expenses include (Additional OTC items now reimbursable):
* These do not generally qualify. For a medically necessary cosmetic procedure, enclose a note with the claim stating the existing medical condition and why the treatment is required.