Can You Buy Supplements With a Flexible Spending Account?

A Flexible Spending Account (FSA) allows individuals to set aside pre-tax money from their paycheck for eligible out-of-pocket medical, dental, and vision expenses. The primary advantage of an FSA is tax savings, as contributions are not subject to federal income, Social Security, or Medicare taxes, effectively reducing taxable income. This makes various health-related expenses more affordable, assisting with costs not covered by insurance.

Eligibility Criteria for Supplements

The Internal Revenue Service (IRS) defines qualified medical expenses as amounts paid for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body”. Most over-the-counter vitamins, nutritional supplements, and herbal products are generally not eligible for FSA reimbursement. This is because they are typically viewed as being for general health and wellness, rather than for treating a specific medical condition. The IRS considers these items to have a “dual-purpose” if they can be used for general health maintenance alongside a potential medical application, making them ineligible without further documentation.

However, exceptions exist when supplements are recommended by a healthcare professional to treat a specific medical condition. In such instances, a Letter of Medical Necessity (LOMN) becomes a crucial document to establish eligibility. An LOMN, essentially a doctor’s note, must clearly state the diagnosed medical condition and explain how the specific supplement is necessary to treat, mitigate, or prevent that condition. The letter should include details such as the specific supplement, its dosage, frequency of use, and the duration for which it is needed.

For example, while general multivitamins are typically not covered, a vitamin D supplement might qualify if prescribed for a diagnosed vitamin D deficiency, or an iron supplement for anemia. Prenatal vitamins and glucosamine for joint pain are also often eligible due to their recognized medical applications. Conversely, items like protein powder bought for general fitness or herbal remedies for overall well-being usually remain ineligible, as they do not address a specific medical condition. The ultimate decision on eligibility, even with an LOMN, rests with the FSA administrator, who evaluates whether the expense aligns with IRS guidelines.

Using Your FSA for Supplement Purchases

Once eligibility for a supplement is confirmed, there are typically two main ways to use your FSA funds. Many FSA plans provide a debit card, which acts like a regular debit card but is linked directly to your FSA balance. This card can be used at pharmacies, grocery stores, and other merchants that have an Inventory Information Approval System (IIAS) in place, which automatically identifies eligible healthcare products at the point of sale. Even with an FSA debit card, retain all itemized receipts, as the IRS requires substantiation for all FSA transactions and your administrator may request them for verification.

For purchases not made with the FSA debit card, individuals can seek reimbursement. This process involves submitting a claim form to the FSA administrator, accompanied by the necessary documentation. Key documents include an itemized receipt detailing the product or service, the date of purchase, the provider’s name, and the amount charged. If a Letter of Medical Necessity was required to establish eligibility for the supplement, it must be included with the reimbursement claim, along with any relevant prescriptions or Explanation of Benefits (EOB) from an insurance carrier.

Submit claims promptly and keep meticulous records of all expenses and supporting documentation for at least three years, as these records may be required for an IRS audit. Most FSA administrators offer online portals or mobile apps to simplify the claim submission process, allowing for easy uploading of documents and tracking of claim status.