Can You Use an FSA Card for Vitamins?

A Flexible Spending Account (FSA) offers a tax-advantaged way to pay for certain out-of-pocket healthcare costs. Funds are typically deducted from an employee’s paycheck before taxes, leading to potential tax savings. This account can be used for eligible medical, dental, and vision expenses for the account holder, their spouse, and dependents. This article clarifies the rules surrounding FSA eligibility for vitamins.

Understanding FSA Eligibility for Health Expenses

Flexible Spending Accounts cover “medical care” expenses, as defined by the Internal Revenue Service (IRS). This definition includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. The primary intent must be to alleviate or prevent a physical or mental disability or illness. General health benefits or cosmetic purposes do not qualify.

For an expense to be eligible, it must directly relate to a medical condition, not simply promoting overall wellness. Costs for equipment, supplies, and diagnostic devices for medical purposes can be included. This principle distinguishes between medically necessary items and those for general health. The IRS provides guidelines to ensure FSA funds are used appropriately.

Vitamins and Supplements: Eligibility Rules

Most vitamins and dietary supplements are not eligible FSA expenses if taken for general health, well-being, or nutritional purposes. The IRS views such items as being for ordinary good health rather than for treating a specific medical condition.

An exception exists when a vitamin or supplement is prescribed by a medical professional to treat a specific medical condition. In such cases, the item may become eligible for reimbursement. Examples include Vitamin D for a diagnosed deficiency, prenatal vitamins for preventing birth defects and supporting fetal development, or glucosamine and chondroitin supplements for treating joint conditions like arthritis.

For vitamins and supplements not automatically eligible, a “Letter of Medical Necessity” (LMN) is required. An LMN is a document from a licensed medical practitioner explaining why a specific item is necessary to treat a diagnosed medical condition. This letter should detail the medical condition, how the item treats the condition, and the duration for which the treatment is needed. The LMN helps substantiate that the purchase is for medical care and not for general health or personal use.

Using Your FSA Card and Documentation

Using an FSA card for eligible expenses functions much like a debit card. It allows direct payment for qualified medical costs, drawing funds from the account. While many transactions at healthcare-related merchants or stores using an Inventory Information Approval System (IIAS) may be automatically approved, not all purchases are.

If a transaction is flagged or denied, or if an expense is paid out-of-pocket, substantiation is required. This involves submitting documentation to the FSA administrator, proving the expense’s eligibility. Required documents include an itemized receipt showing the date of service or purchase, a description of the item or service, the dollar amount, and the provider or store name. If an LMN was necessary for the purchase, a copy should also be included with the claim.

Maintaining detailed records, including receipts and Explanation of Benefits (EOBs) from insurance, is important. These documents are for verification by the FSA administrator and in the event of an IRS audit to ensure compliance with tax regulations. Proper record-keeping helps demonstrate that FSA funds were used for qualified medical expenses, helping avoid potential tax implications.