Does an FSA Cover Pads and Other Feminine Products?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their paycheck to cover eligible healthcare expenses. This arrangement reduces taxable income and helps manage out-of-pocket medical costs. The funds in an FSA are typically available for use at the beginning of the plan year, providing access to the full elected amount for qualified health-related purchases.

FSA Eligibility for Feminine Hygiene Products

Feminine hygiene products, including items like pads, tampons, liners, menstrual cups, and sponges, are now considered qualified medical expenses under Flexible Spending Accounts. This change was enacted through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. Before this legislation, these products were not eligible for reimbursement.

The CARES Act expanded the definition of “qualified medical expenses” to include menstrual care products, reversing prior IRS guidance. This reclassification became effective retroactively to January 1, 2020. Individuals can now use their FSA funds to purchase these items, acknowledging them as medical necessities.

Using Your FSA for Eligible Purchases

There are two methods for utilizing your Flexible Spending Account for eligible expenses. Many FSA plans provide a debit card linked to your FSA balance. This card can be used directly at the point of sale at approved merchants, such as pharmacies or grocery stores, that participate in an Inventory Information Approval System (IIAS). These systems automatically verify item eligibility, streamlining transactions and often eliminating the need for further documentation.

Alternatively, individuals can pay for eligible items out-of-pocket using personal funds and then seek reimbursement from their FSA administrator. This process involves submitting a claim form with supporting documentation. Reimbursement claims can be filed online through a plan’s portal or mobile application, or by mail. Once the claim is reviewed and approved, funds are disbursed via direct deposit or check.

Documentation and Record Keeping

Maintaining documentation is important for all Flexible Spending Account purchases, even when using an FSA debit card. While many debit card transactions are automatically approved at participating merchants, your FSA administrator may still request substantiation for certain purchases. The Internal Revenue Service (IRS) requires that all FSA expenditures be validated as eligible medical expenses.

Itemized receipts are the required form of documentation for substantiation. These receipts should clearly show the date of purchase, a detailed description of the item, the amount paid, and the name of the merchant. Keeping these records ensures compliance with IRS regulations and helps facilitate any substantiation requests or audits from your FSA plan administrator.