Are Orthotics Covered by an FSA?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money for eligible healthcare expenses. Orthotics, specialized shoe inserts designed to support, align, or correct foot abnormalities, are an eligible expense under an FSA. Coverage is contingent upon meeting specific criteria and providing proper documentation to the FSA administrator.

Eligibility and Documentation for Orthotics

The eligibility of orthotics for FSA reimbursement depends on their medical necessity and whether they are custom-made or over-the-counter. Custom-made orthotics are medical devices, designed for an individual’s unique foot structure to address a diagnosed medical condition, making them eligible for FSA coverage. Over-the-counter shoe inserts are generally not eligible unless a healthcare provider specifically prescribes them to treat a medical condition.

To substantiate medical necessity, a doctor’s prescription or a Letter of Medical Necessity (LMN) from a qualified healthcare provider is required. An LMN is a formal document explaining why a product or service is medically necessary. This letter should include the patient’s diagnosis, how the orthotics will treat the condition, and the duration needed. Detailed receipts showing the date of service, provider’s name, and an itemized description of the orthotics purchased are also essential for reimbursement.

How to Use Your FSA

Once you have secured the necessary documentation, utilizing your FSA for orthotics can be done through a few actions. Many FSA plans provide a debit card for direct payment at the point of sale. If the vendor accepts FSA debit cards, you can use it for your purchase. Even with card usage, you may still need to submit supporting documentation, such as the prescription or LMN and the detailed receipt, to your FSA administrator for verification.

If an FSA debit card was not used, you will need to submit a claim for reimbursement. This process involves completing a claim form, attaching the required documentation like the prescription or LMN and the detailed receipt, and submitting it. The FSA administrator will then review your submission and, if approved, reimburse you for the eligible expense. Keep copies of all documentation—prescriptions, LMNs, and receipts—for your records, as this is prudent for potential audits by the Internal Revenue Service (IRS) or your plan administrator.

Important Considerations

When planning to use your FSA for orthotics, be aware of several overarching FSA rules. Every FSA plan has variations in its rules regarding eligible expenses and submission procedures, so reviewing your specific plan documents or contacting your FSA administrator is advisable. This ensures you understand any unique requirements or limitations that might apply to your account.

FSAs have a “use it or lose it” rule, meaning funds not used by the end of the plan year are forfeited. Some plans may offer a grace period (usually an additional 2.5 months) or a limited carryover amount (e.g., up to $640 for the 2024-2025 benefit year). Timing your orthotics purchase within the plan year or applicable grace period is important. Expenses must be incurred while covered by the FSA plan, meaning the service or product must be received within that timeframe. Orthotics for eligible dependents, such as your spouse or children, can also be covered under your FSA.