Can You Use Your FSA for Probiotics?

A Flexible Spending Account (FSA) is an employer-sponsored benefit allowing individuals to set aside pre-tax money for out-of-pocket healthcare costs. Contributions are not subject to federal income, Social Security, or Medicare taxes, offering a tax advantage. FSA funds cover qualified medical and dental expenses for the account holder, their spouse, and eligible dependents. This article explores the eligibility of probiotics as an FSA expense, detailing the conditions and procedures for their purchase.

Understanding FSA Eligible Expenses

The Internal Revenue Service (IRS) defines qualified medical expenses as costs primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. This definition is outlined in IRS Publication 502. Expenses beneficial for general health, such as vitamins or general wellness supplements, are not eligible.

For health-related products with a dual purpose or not explicitly listed as eligible, a Letter of Medical Necessity (LMN) is required. An LMN is a document from a licensed healthcare provider certifying that a specific item or service is medically necessary to treat a diagnosed condition. This substantiates the expense is for a medical purpose, aligning with IRS guidelines.

Probiotics as an FSA Expense

Probiotics are not considered FSA-eligible if purchased for overall wellness or preventive health without a specific medical diagnosis. They are categorized as dietary supplements, which fall outside the scope of qualified medical expenses. However, probiotics become an eligible expense when a healthcare provider recommends them as part of a treatment plan for a specific medical condition.

For probiotics to qualify, a Letter of Medical Necessity (LMN) from a qualified healthcare provider is required. This medical professional could be a doctor, physician assistant, or nurse practitioner. The LMN must clearly state the specific medical condition being treated, how the probiotic is recommended to alleviate or treat that condition, the specific type and dosage, and the duration of the treatment.

Examples of medical conditions for which probiotics might be prescribed include irritable bowel syndrome (IBS), various digestive disorders, or antibiotic-associated diarrhea. If the treatment extends beyond the current plan year, a new LMN may need to be provided to the FSA administrator.

Using Your FSA for Probiotic Purchases

Once you have obtained a Letter of Medical Necessity (LMN) and purchased the probiotics, there are two primary methods for utilizing your FSA funds. One method is using an FSA debit card at the point of purchase. These cards function similarly to regular debit cards but are linked directly to your FSA and designed for eligible medical expenses.

Many pharmacies and stores use an Inventory Information Approval System (IIAS), which automatically identifies eligible products at checkout. If the purchase is not automatically approved, or if you did not use your FSA debit card, you will need to submit a claim for reimbursement. For reimbursement, you must provide specific documentation to your FSA administrator.

Required documents include an itemized receipt showing the date of purchase, the specific probiotic item, and the cost. The LMN from your healthcare provider must also be submitted. Most FSA administrators offer convenient ways to submit claims, such as online portals, mobile applications, or mail. Retain all records for potential IRS audits.