Can You Use FSA for Feminine Hygiene Products?

A Flexible Spending Account (FSA) is an employer-sponsored benefit allowing individuals to set aside pre-tax dollars from their paycheck to cover eligible healthcare expenses. This arrangement reduces taxable income, potentially leading to significant tax savings. Funds contributed to an FSA are typically subject to a “use-it-or-lose-it” rule, meaning any unspent money by the end of the plan year may be forfeited, though some plans offer grace periods or limited carryovers. The Consolidated Appropriations Act of 2021 expanded the eligibility of certain items, including feminine hygiene products, as qualified medical expenses, effective January 1, 2020.

Understanding What Qualifies

Menstrual care products are eligible medical expenses, allowing them to be purchased using FSA funds. This aligns with the Internal Revenue Service (IRS) definition of medical care. Eligible products include tampons, pads, liners, menstrual cups, and sponges. These items are specifically for feminine hygiene and are distinct from general personal care or cosmetic products, which typically do not qualify.

How to Pay for Purchases

Using an FSA to pay for eligible feminine hygiene products involves two primary methods. Many individuals utilize an FSA debit card for direct payment at the point of sale. For a transaction to be automatically approved, the merchant typically needs an Inventory Information Approval System (IIAS) or a specific Merchant Category Code (MCC) identifying them as a healthcare provider. If a merchant does not have such a system, the transaction might require manual substantiation later.

Alternatively, individuals can pay for eligible items out-of-pocket and submit a claim for reimbursement from their FSA administrator. This process involves completing a reimbursement request form and providing detailed purchase documentation. Approved funds are then disbursed to the individual, often via direct deposit. This method offers flexibility, especially when purchasing items from retailers that cannot directly process FSA debit cards.

Documentation and Record Keeping

Maintaining accurate records is essential for all FSA purchases, even when using a debit card, due to IRS substantiation requirements. For every transaction, individuals should retain itemized receipts or other supporting documentation. A compliant receipt must clearly show:

• The date of purchase or service
• A detailed description of the item or service
• The amount paid
• The name of the provider or vendor

Credit card receipts or canceled checks alone are generally insufficient as they often lack the necessary itemized detail.

These records are important because FSA administrators may request documentation to verify expense eligibility, especially if a transaction cannot be automatically substantiated. Proper documentation is also important in the event of an IRS audit, ensuring tax compliance. Organizing and storing these receipts, physically or digitally, helps streamline verification and demonstrates adherence to FSA guidelines.