Can I Use My FSA for Cosmetic Procedures?

Flexible Spending Accounts (FSAs) allow you to pay for healthcare expenses with pre-tax dollars. Many wonder if cosmetic procedures are eligible for FSA reimbursement. Eligibility is not straightforward and depends on specific tax regulations. Understanding these rules ensures proper use of your FSA funds.

Understanding FSA Eligibility

The Internal Revenue Service (IRS) defines a qualified medical expense for FSA reimbursement. According to IRS regulations (IRC 213(d)), an expense must be primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease. It can also be for affecting any structure or function of the body. This definition means expenses for general health improvement or cosmetic enhancement, without a medical cause, are not eligible. The procedure’s primary intent, medical or aesthetic, determines eligibility.

Medically Necessary Cosmetic Procedures

Certain cosmetic procedures can qualify for FSA reimbursement if they meet the IRS criterion of medical necessity. This means the procedure’s purpose is to correct a physical defect or disfigurement resulting from a congenital abnormality, personal injury, or a disfiguring disease. For instance, reconstructive surgery following a mastectomy for breast cancer is considered medically necessary. Procedures to repair a cleft palate or address scar revision from an accident also qualify, as they aim to restore function or correct a deformity.

Eyelid surgery (blepharoplasty) may be eligible if performed to improve vision impaired by drooping eyelids, rather than for purely cosmetic reasons. Botox injections, while commonly used cosmetically, can also be eligible if prescribed by a doctor to treat a medical condition like chronic migraines. Skin treatments, such as laser therapy or chemical peels, may also qualify if recommended by a dermatologist to treat severe acne or scarring.

Purely Cosmetic Procedures

Conversely, most cosmetic procedures are not eligible for FSA reimbursement. They are primarily for aesthetic enhancement and do not treat a specific medical condition or improve a body function. Common examples include facelifts, liposuction, and breast augmentation performed for aesthetic reasons.

Other ineligible procedures include teeth whitening, non-medically necessary Botox for wrinkle reduction, and hair transplants unless for a specific medical condition. Rhinoplasty, or a “nose job,” is ineligible if its main purpose is cosmetic rather than correcting a breathing issue or deformity. The IRS explicitly states that elective and cosmetic surgeries are not covered under its definition of a medical expense.

Submitting Your FSA Claims

When submitting an FSA claim for a potentially medically necessary procedure, specific documentation is required to substantiate eligibility. A Letter of Medical Necessity (LMN) from your healthcare provider is essential. This letter should clearly state the diagnosed medical condition, describe how the treatment will alleviate it or restore function, and include the specific treatment recommended. The LMN helps prove the service is for medical rather than personal use.

In addition to the LMN, you will need detailed receipts from the service provider, including the date, provider’s name, service description, and amount charged. If applicable, an Explanation of Benefits (EOB) from your health insurance carrier is also needed, especially if insurance paid a portion. Most FSA administrators offer online portals for claim submission, allowing you to upload digital copies. Keep thorough records of all expenses and be aware of any claim submission deadlines set by your FSA plan.