Can I Use My FSA for CoolSculpting?
Learn if CoolSculpting qualifies as a medical expense for your FSA. Understand the criteria that separate a cosmetic choice from a reimbursable treatment.
A Flexible Spending Account, or FSA, is an employer-sponsored savings account that allows you to set aside pre-tax dollars for healthcare costs. CoolSculpting is a non-invasive procedure that uses controlled cooling to eliminate fat cells. Many individuals wonder if they can use the tax-advantaged funds in their FSA to pay for this body-contouring treatment. The answer depends on specific Internal Revenue Service (IRS) regulations.
IRS Rules for FSA Medical Expenses
The ability to use FSA funds is governed by the IRS, which defines what constitutes a qualified medical expense. Under Section 213 of the Internal Revenue Code, “medical care” includes payments for the diagnosis, cure, treatment, or prevention of disease. This definition is the standard that FSA administrators use to approve or deny reimbursement claims.
The IRS rules state that expenses for cosmetic procedures are generally not considered qualified medical expenses. This exclusion applies to any procedure directed at improving appearance that does not promote the proper function of the body or treat an illness or disease. CoolSculpting, because it is typically performed for aesthetic reasons, falls into this excluded category.
There is a specific exception to this exclusion. A cosmetic procedure can qualify for FSA reimbursement if it is necessary to treat a deformity arising from a congenital abnormality, a personal injury, or a disfiguring disease. In these limited situations, the procedure is not considered merely cosmetic but a treatment to correct a specific medical issue.
Proving Medical Necessity for CoolSculpting
Because CoolSculpting is presumed to be a cosmetic procedure, the responsibility falls on you to demonstrate that it meets the IRS exception for medical necessity. Simply wanting the procedure for general wellness is not sufficient. You must provide proof that the treatment is required to address a specific, diagnosed medical condition.
The primary document required is a Letter of Medical Necessity (LMN) from a qualified physician. This letter explains to the FSA administrator why the CoolSculpting procedure is not for cosmetic purposes. The LMN must be detailed and specific to withstand scrutiny during the claims review process.
A valid LMN must contain several key pieces of information. It needs to state the patient’s specific medical diagnosis, such as lipodystrophy, which is a condition causing an abnormal distribution of body fat. The letter must include a statement from the doctor recommending CoolSculpting as the necessary treatment for this condition. It should also explain why the treatment is intended to correct a deformity or restore normal function, rather than just improve appearance.
The FSA Reimbursement Process
After securing a Letter of Medical Necessity from your physician, you can proceed with the treatment and the subsequent claim for reimbursement. The first step is to pay for the CoolSculpting procedure directly out-of-pocket. FSA plans operate on a reimbursement basis for expenses that require this level of documentation.
Once you have paid for the service, you must gather the required paperwork for your claim. This package will include the itemized receipt from the CoolSculpting provider, stating the service performed and the cost. You will submit this receipt along with the Letter of Medical Necessity from your doctor.
The final step is to submit the claim package to your FSA administrator. Most administrators have an online portal for uploading documents, though some may still accept claims via mail or fax. After submission, the administrator will review your claim and documentation to determine if it meets IRS requirements, and you will be notified if your claim is approved for reimbursement.