Can I Use FSA for Sunscreen? What You Need to Know

Flexible Spending Accounts (FSAs) allow individuals to save money on health-related expenses by setting aside pre-tax dollars from their income, effectively reducing taxable income. Understanding what qualifies as an eligible expense is important for using an FSA, as it covers a wide range of healthcare products and services, which leads many to question specific item eligibility.

Sunscreen Eligibility for FSA

Sunscreen can be an eligible expense for Flexible Spending Accounts, provided it meets specific criteria established by the Internal Revenue Service (IRS) and the Food and Drug Administration (FDA). Its eligibility stems from its role in preventing sun damage and skin cancer, classifying it as a medical care expense rather than a cosmetic one.

To qualify, sunscreen products must be broad-spectrum, protecting against both UVA and UVB rays, and have a minimum Sun Protection Factor (SPF) of 15 or higher. Many products, including lip balms and facial moisturizers, can qualify if they meet these broad-spectrum and SPF requirements.

In some situations, particularly for items that have both a medical and a general health benefit, a Letter of Medical Necessity (LMN) might be required. An LMN is a document from a doctor or other medical practitioner explaining why a specific product or service is recommended for a health condition. This letter helps substantiate the purchase is for medical purposes, outlining the medical condition, recommended treatment, and expected duration.

Purchasing and Documentation

Using your FSA for eligible sunscreen purchases involves two methods. Many FSA plans provide a debit card, allowing direct payment at the point of sale. This simplifies the process as funds are automatically withdrawn from your FSA balance. Use these cards at approved locations, such as pharmacies or general retailers that identify eligible items.

Even when using an FSA debit card, retain all itemized receipts for your purchases. The IRS requires that all FSA purchases be substantiated, and your FSA administrator may request proof. Receipts should clearly show the date of purchase, the merchant’s name, a detailed description of the item, and the amount paid. Credit card receipts or balance-forward statements are generally not sufficient.

If you pay out-of-pocket, seek reimbursement by submitting a claim to your FSA administrator with the itemized receipt. If a Letter of Medical Necessity was required for the sunscreen to be eligible, this document must also be submitted with your reimbursement claim.

Understanding FSA Eligibility More Broadly

Flexible Spending Accounts cover qualified medical expenses as defined by the IRS under Internal Revenue Code Section 213. This includes amounts paid for the diagnosis, treatment, or prevention of disease, or for affecting any body structure or function. The goal is to allow individuals to use pre-tax funds for expenses that address a physical or mental defect or illness.

Beyond specific products like sunscreen, FSAs cover common out-of-pocket costs related to medical, dental, and vision care. These include deductibles, co-payments, and co-insurance amounts for health plans. Many prescription drugs and certain over-the-counter medications and health-related items are also eligible, such as bandages, blood pressure monitors, and pregnancy test kits.

While FSAs offer tax advantages for healthcare costs, not all health-related items or services qualify. Expenses for general health or cosmetic purposes, without a specific medical necessity, are not eligible. Your employer’s plan documents may outline additional limitations, so consult your FSA plan administrator for guidance.