Are Orthopedic Shoes FSA Eligible for Reimbursement?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their salary to cover eligible healthcare expenses. This arrangement reduces taxable income, providing a financial advantage for managing health-related costs. The primary objective of an FSA is to help participants pay for medical, dental, and vision expenses not covered by health insurance. This article aims to clarify the eligibility of orthopedic shoes for FSA reimbursement and outline the necessary steps for submitting a claim.

Understanding General FSA Eligibility

Flexible Spending Accounts operate under specific Internal Revenue Service (IRS) guidelines regarding eligible expenses. Generally, an expense qualifies for FSA reimbursement if it is primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. This definition is outlined in IRS Publication 502. Expenses for general health, comfort, or cosmetic purposes are typically not eligible.

Commonly eligible expenses include doctor visits, prescription medications, co-pays, deductibles, and certain over-the-counter items. However, items that could be used for both medical and general purposes, often referred to as “dual-purpose” items, generally require additional documentation to prove medical necessity. This ensures that funds are used for legitimate medical care.

Specific Requirements for Orthopedic Shoe Eligibility

Orthopedic shoes can be eligible for FSA reimbursement, but only under specific circumstances that establish their medical necessity. They are eligible when prescribed by a licensed healthcare professional, such as a doctor or podiatrist, to treat a diagnosed medical condition. Conditions that may warrant orthopedic shoes include diabetes, severe arthritis, foot deformities, or alignment issues of the musculoskeletal system. Without a clear medical necessity, shoes purchased for general comfort or style are not eligible.

A Letter of Medical Necessity (LMN) from the healthcare provider is required to substantiate the expense. This letter should detail the specific medical condition being treated, explain how the orthopedic shoes will alleviate or treat the condition, and sometimes indicate the duration for which the shoes are needed. The LMN helps confirm the purchase is for a medical purpose. Some plans may only reimburse the cost difference between the orthopedic shoes and a standard pair of shoes.

The FSA Reimbursement Process

After purchasing orthopedic shoes and gathering all required documentation, including the Letter of Medical Necessity and an itemized receipt, submit a reimbursement claim. Most FSA providers offer submission methods like online portals, mobile applications, or mail/fax. The itemized receipt must clearly show the vendor name, date of purchase, a description of the item, and the total cost. Credit card receipts or balance statements alone are not sufficient, as they often lack the required detailed description.

If an FSA debit card was used for the purchase, documentation may still be requested by the administrator to verify eligibility, especially for items requiring an LMN. Retain all records, as the IRS may request them to verify expense eligibility. Claims are processed within a few business days, and reimbursement is issued via direct deposit or check.