Are Period Panties FSA and HSA Eligible?

Fortunately, certain tax-advantaged accounts are designed to help alleviate some of the financial burden associated with health-related purchases. These specialized accounts allow individuals to set aside pre-tax money, which can then be used for a variety of qualified medical expenses. Understanding how these accounts function and what items are eligible can lead to notable savings on essential health products and services.

What are FSA and HSA?

Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are tax-advantaged savings options for qualified medical expenses. FSAs are typically employer-sponsored benefits that allow employees to contribute pre-tax income to cover healthcare costs. FSAs often have a “use-it-or-lose-it” rule, meaning funds must be spent within the plan year, though some plans offer a grace period or limited carryover.

Conversely, Health Savings Accounts (HSAs) are available to individuals enrolled in a high-deductible health plan (HDHP). Unlike FSAs, HSA funds are owned by the individual and roll over year to year, accumulating over time. Both types of accounts provide a way to pay for eligible health expenses with untaxed dollars, which can reduce overall healthcare costs.

Eligibility of Period Products

Menstrual care products, including period panties, are recognized as eligible expenses for both Flexible Spending Accounts and Health Savings Accounts. This eligibility stems from the CARES Act of 2020. Before this act, such products were not consistently classified as qualified medical expenses.

The CARES Act reclassified menstrual care products as eligible under Section 213 of the tax code. The change was retroactive to January 1, 2020, making purchases from that date eligible for reimbursement. The reclassification applies to a range of products:
Tampons
Pads
Liners
Cups
Sponges
Similar items used for menstruation, including disposable and non-disposable period underwear.

Using Your FSA or HSA Funds

Accessing FSA or HSA funds for eligible purchases involves specific procedures. Many plans offer a dedicated debit card for direct payment at the point of sale. This method often automatically substantiates the purchase, reducing the need for further action.

Alternatively, you can pay for eligible expenses out-of-pocket and submit a claim for reimbursement. This process requires submitting an itemized receipt to your plan administrator. The receipt should clearly show:
The patient’s name
The provider or merchant’s name
The date of service or purchase
A detailed description of the item or service
The cost

Maintaining accurate records is important for all transactions, even with a debit card, as documentation may be requested by your plan administrator or during an IRS audit. For reimbursement claims, you may also need a statement confirming the expense has not been covered by another health plan. Account holders are responsible for retaining proof of eligibility for all purchases.