Are Probiotics FSA Eligible With a Letter of Medical Necessity?

A Flexible Spending Account (FSA) is an employer-sponsored arrangement allowing participants to set aside pre-tax dollars from their salary to cover qualified out-of-pocket medical expenses. By contributing pre-tax funds, individuals can reduce their taxable income, leading to tax savings on eligible healthcare expenditures throughout the year. This enables the use of tax-advantaged money for various health-related services and products.

Understanding FSA Eligibility

For an expense to qualify for FSA reimbursement, it must serve the purpose of diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatments affecting any structure or function of the body. These criteria are established by Internal Revenue Service (IRS) guidelines, detailed in IRS Publication 502. Expenses that are merely beneficial to general health, such as vitamins not prescribed for a specific medical condition, do not qualify.

Common examples of eligible expenses include co-payments for doctor visits, prescription medications, deductibles, and co-insurance. Dental care, such as cleanings, fillings, and orthodontia, also qualifies, as do vision services like eye exams, eyeglasses, and contact lenses. Many over-the-counter medications became eligible without a prescription as of 2020, expanding the range of reimbursable items.

Probiotics and Medical Necessity

Probiotics, typically categorized as dietary supplements, are not eligible for FSA reimbursement without specific medical justification. The IRS considers many supplements and vitamins ineligible unless prescribed to address a particular medical condition. However, when a qualified healthcare provider determines that probiotics are necessary to treat a specific medical ailment, they can become an eligible expense.

To establish this medical necessity, a “Letter of Medical Necessity” (LMN) is required. An LMN is a written statement from a healthcare professional, such as a physician, physician assistant, or nurse practitioner, affirming that the probiotic is essential for treating a diagnosed condition. This document must outline the specific medical condition being treated, how the probiotic is intended to treat that condition, and the recommended dosage or duration of treatment.

With a valid LMN, the probiotic is considered a “prescribed medicine” by the FSA administrator, making it eligible for reimbursement. The LMN transforms a generally ineligible health supplement into a qualified medical expense. It is advisable to confirm with your FSA provider that they will accept the LMN for the probiotic expense before making the purchase.

Submitting Your Reimbursement Claim

Once you have purchased the eligible probiotic and obtained the necessary documentation, including the itemized receipt and, if applicable, the Letter of Medical Necessity, you can submit your reimbursement claim. Most FSA administrators offer multiple methods for submission, including online portals, mobile applications, or traditional mail. Digital submissions involve uploading images of your supporting documents, such as a PDF or JPG of the receipt and LMN.

When completing the claim form, you will need to provide details such as the amount paid, the provider’s name, the date the service was incurred, and the person who received the service. After submission, claims are processed within three to five business days. Reimbursement is issued via direct deposit to your bank account, which is the fastest method, or through a mailed check, which may take seven to ten business days.