Can I Buy Probiotics With My FSA Account?

FSA Eligibility for Health Products

A Flexible Spending Account (FSA) allows employees to set aside pre-tax money for qualified medical expenses. This reduces taxable income, providing a tax advantage on healthcare costs. These accounts are “use-it-or-lose-it” plans, meaning funds must typically be spent within the plan year or a short grace period (usually up to two and a half months), though a limited carryover (around $640 for 2024) may be allowed.

Internal Revenue Service (IRS) guidelines, outlined in Publication 502, define eligible medical expenses. An expense qualifies if its primary purpose is to diagnose, cure, mitigate, treat, or prevent a disease, or to affect any structure or function of the body. This broad definition covers a range of healthcare services, including doctor visits, prescription medications, and certain medical devices. The expense must be incurred for the medical care of the account holder, their spouse, or qualified dependents.

For over-the-counter (OTC) health products, specific rules apply regarding FSA eligibility. Before 2020, most OTC medications and products required a doctor’s prescription. The CARES Act removed this requirement for many OTC medications and menstrual care products, allowing purchase without a prescription. However, for many other OTC health-related products, including certain dietary supplements, a prescription or a Letter of Medical Necessity (LOMN) from a healthcare provider generally remains necessary.

A Letter of Medical Necessity (LOMN) is a written statement from a healthcare professional confirming that a specific item, service, or treatment is medically necessary for a diagnosed condition. This document establishes that the expense is not for general health or cosmetic purposes, but rather for the treatment or alleviation of a particular illness or medical condition. Without such documentation, many items that could potentially benefit health are not considered eligible medical expenses under FSA rules.

Probiotics as Eligible Expenses

Probiotics are commonly used for general digestive health and overall wellness, often categorized as dietary supplements. When used for general purposes, they are typically not considered eligible medical expenses by the IRS. The IRS generally views items for general health maintenance, rather than for the specific treatment of a diagnosed medical condition, as non-qualifying expenses.

However, probiotics can become an eligible expense if they are specifically prescribed by a healthcare provider to treat a diagnosed medical condition. For instance, a doctor might prescribe a probiotic to address symptoms of Irritable Bowel Syndrome (IBS), to manage Crohn’s disease, or to counteract the gastrointestinal side effects of antibiotic therapy. In such cases, the probiotic is no longer merely a general wellness supplement but a component of a prescribed medical treatment plan.

The prescription or LOMN must clearly state the medical condition being treated and explain why the probiotic is essential for that treatment. The documentation provided by the healthcare provider should explicitly link the probiotic to the specific medical condition. This ensures that the expense meets the IRS criteria of being primarily for the purpose of mitigating, treating, or preventing a disease. Without this clear connection and supporting documentation, the purchase of probiotics with FSA funds would likely be disallowed during an audit or substantiation process by the FSA administrator. The intent and documented medical necessity transform a general health product into a qualified medical expense.

Using Your FSA for Probiotic Purchases

Once a probiotic is deemed eligible through a prescription or LOMN, several methods exist for purchasing it with FSA funds. The most common approach involves using an FSA debit card, which functions like a regular debit card but is linked to your FSA balance. When using this card at a pharmacy or store, the transaction is typically processed directly, deducting the cost from your available FSA funds. However, even with an FSA debit card, some transactions may require further substantiation, particularly for items not automatically recognized as eligible.

Alternatively, you can pay out-of-pocket and submit a claim for reimbursement from your FSA. This method requires careful record-keeping to ensure successful reimbursement. To facilitate reimbursement, you will need to provide specific documentation to your FSA administrator. This documentation typically includes an itemized receipt, a copy of the prescription, or the LOMN.

The itemized receipt is crucial and should clearly display several key details. It must include the date of purchase, merchant name, total amount paid, and a clear description of the item, specifically identifying the probiotic. Generic receipts or those lacking a detailed item description may not be sufficient for substantiation. It is advisable to keep copies of all prescriptions or LOMNs with your purchase receipts.

FSA administrators are responsible for ensuring that expenses are eligible under IRS rules. They may request additional documentation or clarification if the initial submission is unclear or incomplete. Maintaining organized records of all medical expenses, prescriptions, and LOMNs is important for reimbursement and potential IRS audits, which can occur for up to three years after the tax filing deadline.