Does FSA Cover Shipping Charges and Fees?
Understand FSA coverage for shipping charges. Learn eligibility rules, required documentation, and the reimbursement process for medical expense shipments.
A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money for eligible out-of-pocket medical and dental expenses. This financial tool can provide tax savings by reducing an individual’s taxable income, as contributions are not subject to federal income tax, Social Security, or Medicare taxes. Many people wonder if shipping charges associated with health-related purchases can also be covered by their FSA, a common inquiry given the increasing prevalence of online shopping for medical supplies and prescriptions.
Understanding FSA Eligibility
The Internal Revenue Service (IRS) defines “medical care” as amounts paid for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” Common expenses that qualify for FSA reimbursement include deductibles, co-payments, and prescription medications. Over-the-counter medicines and feminine hygiene products have been eligible since January 1, 2020, without requiring a doctor’s prescription. Additionally, expenses for medical equipment, such as crutches, and vision care items like eyeglasses and contact lenses, are typically covered.
Shipping Charge Coverage Criteria
Shipping and handling fees are generally eligible for FSA reimbursement, but only when they are directly tied to the procurement of an FSA-eligible item. For instance, if you order prescription medication or a medical device online, the shipping fee for that specific item would typically be reimbursable. Conversely, shipping charges for items that are not FSA-eligible, such as general hygiene products or cosmetics without a medical indication, are not covered. If an order contains both eligible and non-eligible items, only the shipping fee directly attributable to the eligible products can be claimed.
Required Documentation for Reimbursement
To successfully claim reimbursement for eligible shipping charges, specific documentation is necessary to substantiate the expense. An itemized receipt is the most common form of documentation, which should clearly differentiate the cost of the eligible item from the shipping charge. This receipt must include key details such as the date the service was received or the purchase was made, a description of the item or service, the dollar amount, and the name of the provider or store. Other acceptable forms of documentation may include an Explanation of Benefits (EOB) form from an insurance carrier. Pharmacy printouts for prescriptions are also generally accepted. However, credit card receipts, canceled checks, or simple balance forward statements are typically not sufficient as they often lack the detailed information required by the IRS to verify eligibility.
The Reimbursement Process
Once all necessary documentation is gathered, submitting an FSA reimbursement claim involves several procedural steps. Most FSA administrators offer multiple methods for submission, including online portals, mobile applications, or traditional mail and fax. Online submissions are often the fastest, allowing users to upload scanned copies or photos of their receipts directly to their account. After submission, the FSA administrator will review the claim to ensure it meets requirements. Processing times can vary, typically from a few business days to two weeks. Reimbursements are commonly issued via direct deposit to a linked bank account, or a check may be mailed. If a claim is denied, the administrator will usually provide a reason and may request additional documentation.