Is Align an FSA Eligible Expense for Your Healthcare?

Flexible Spending Accounts (FSAs) offer a tax-advantaged method for managing healthcare costs. Many individuals use these accounts for various medical products and services. A common inquiry concerns the eligibility of specific items, particularly over-the-counter products like probiotics. Understanding FSA eligibility rules is important for utilizing these benefits. This article clarifies what qualifies as an FSA-eligible expense.

Understanding Flexible Spending Accounts (FSAs)

A Flexible Spending Account (FSA) is an employer-sponsored benefit allowing individuals to set aside pre-tax money for eligible healthcare expenses. Contributions are deducted from an employee’s paycheck before federal income, Social Security, and Medicare taxes. This pre-tax contribution reduces taxable income, leading to potential tax savings. FSAs provide a dedicated fund for out-of-pocket medical, dental, and vision costs not typically reimbursed by health insurance plans.

General Rules for FSA Eligibility

The Internal Revenue Service (IRS) establishes guidelines for qualified “medical expenses” for FSA purposes. An expense must be primarily for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” Common categories include doctor visits, prescription medications, dental work, vision care, and medical devices. FSA funds can be used for out-of-pocket costs such as copayments, deductibles, and coinsurance amounts.

Specific Eligibility for Over-the-Counter Products

FSA eligibility changed with the CARES Act in March 2020. This legislation removed the prescription requirement for many over-the-counter (OTC) medications and products, making them FSA-eligible as of January 1, 2020. This broadened the scope of items purchasable with FSA funds, including common pain relievers, cold medicines, and digestive aids.

Despite these changes, the eligibility of probiotics, such as Align, remains nuanced. While the CARES Act expanded OTC eligibility, probiotics are often classified as dietary supplements rather than traditional medicines. For FSA reimbursement, they typically require a Letter of Medical Necessity (LMN) from a healthcare provider. This letter must state the probiotic treats a specific medical condition, not for general wellness, and explain how it diagnoses, cures, mitigates, treats, or prevents a disease, or affects a body function. Confirm with your FSA administrator if a specific probiotic product requires an LMN based on your plan’s interpretation of IRS rules.

Using Your FSA and What to Expect

Once an expense is FSA-eligible, there are common ways to use your funds. Many FSA plans provide a dedicated debit card for direct payment at pharmacies, doctor’s offices, and other approved merchants. Alternatively, pay for eligible expenses out-of-pocket and submit a claim for reimbursement to your FSA administrator. Regardless of the payment method, retain all itemized receipts and supporting documentation. These records are needed to substantiate purchases if requested.

FSAs are subject to a “use-it-or-lose-it” rule, meaning unused funds at the end of the plan year may be forfeited. However, employers may offer options to mitigate this rule. Some plans allow a grace period, up to 2.5 months after the plan year ends, to incur new eligible expenses. Other plans permit a limited amount of funds to be carried over to the next plan year, such as up to $660 for 2025 into 2026. Employers typically offer one of these options, but not both, and availability depends on your plan’s design.