Can You Use Your FSA Internationally?

A Flexible Spending Account (FSA) allows individuals to set aside pre-tax dollars from their salary to cover qualified medical expenses. This can lead to tax savings by reducing taxable income. FSA funds are designated for healthcare costs not typically covered by health insurance plans, such as deductibles, co-payments, and various medical products and services. This tool helps manage out-of-pocket healthcare expenditures.

Eligibility for International FSA Use

Generally, medical care received in foreign countries is eligible for reimbursement through an FSA. The key determinant for eligibility is whether the expense would be considered a qualified medical expense under Internal Revenue Service (IRS) guidelines, regardless of the geographical location where the service was provided. The medical care received abroad must be legal both in the foreign country where it was administered and in the United States. While IRS rules broadly permit international use, it is advisable to consult your specific FSA plan documents. Some plan administrators may have particular procedures or requirements for foreign claims.

Understanding Eligible International Expenses

Specific types of medical expenses incurred internationally qualify for FSA reimbursement, aligning with IRS definitions for domestic expenses. These include common healthcare services such as doctor visits, prescription medications, dental care, and vision care. Medical devices, such as crutches or hearing aids, along with supplies like bandages, are also usually covered if they meet the IRS criteria. Prescription medications obtained while in a foreign country can be eligible, provided the medication is legal in both the foreign country and the United States, and is not imported into the U.S. However, expenses for cosmetic surgery or items solely for general wellness purposes are not eligible, mirroring domestic FSA rules. The IRS provides comprehensive guidance on what constitutes a qualified medical expense in Publication 502.

Required Documentation for International Claims

Proper documentation is essential when seeking reimbursement for international Flexible Spending Account claims. Individuals must gather detailed itemized receipts that clearly state the date the service was received or the purchase was made, a thorough description of the service or item, the name and address of the healthcare provider, and the patient’s name. The amount paid in the foreign currency should also be clearly indicated on the receipt. It is recommended to obtain itemized receipts, as credit card receipts or canceled checks typically lack the necessary detail for substantiation.

Having receipts translated into English can expedite the processing of a claim by the FSA administrator. Retaining original receipts for personal records is a prudent practice, as the IRS may request them for verification purposes.

Submitting Your International FSA Claims

Most FSA administrators offer several convenient methods for claim submission, including online portals, dedicated mobile applications, or traditional mail-in forms. Utilizing online submission or a mobile app often results in faster processing times. FSA administrators generally require that the expense amount be converted to U.S. dollars based on the exchange rate on the date the service was rendered or the payment was made. Individuals should accurately report this converted U.S. dollar amount on their claim form, as reimbursements are issued in U.S. dollars. The IRS offers resources and links to currency exchange rate calculators to assist in determining the correct conversion for claim purposes. After submission, claims are typically processed within a few business days, with reimbursement often issued via direct deposit or check.