Is Distilled Water an FSA Eligible Expense?
Learn about the specific circumstances that make distilled water an FSA-eligible expense and the reimbursement process.
A Flexible Spending Account (FSA) allows individuals to set aside pre-tax money from their paycheck to cover eligible healthcare expenses. This financial tool offers a tax advantage, reducing taxable income while providing funds for out-of-pocket medical costs. A common inquiry among FSA holders concerns the eligibility of distilled water for reimbursement.
FSA Eligibility for Distilled Water
Distilled water is generally not eligible for FSA reimbursement when purchased for common household uses, such as drinking or general cleaning. The Internal Revenue Service (IRS) classifies eligible medical expenses as those primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any part or function of the body. Consequently, distilled water used for non-medical purposes does not meet these criteria.
However, an exception exists when distilled water is deemed medically necessary for a specific health condition or with certain medical devices. In such instances, its eligibility shifts from a common household good to a qualified medical expense.
Qualifying Medical Uses
For example, it is often essential for Continuous Positive Airway Pressure (CPAP) machines, which treat sleep apnea, to prevent mineral buildup and ensure proper function of the humidifier. Nebulizers and humidifiers used for respiratory conditions also frequently require distilled water to deliver medication effectively or to maintain appropriate humidity levels without introducing impurities.
To establish medical necessity, a Letter of Medical Necessity (LMN) or a prescription from a qualified healthcare provider is typically required. An LMN should specify the diagnosed medical condition, explain why distilled water is medically necessary for that condition or device, and indicate the duration for which it will be needed.
Reimbursement Steps
Once a Letter of Medical Necessity or prescription is obtained, along with the receipt for the distilled water, the next step involves submitting a claim for reimbursement. FSA administrators typically offer several methods for submission, including online portals, mobile applications, fax, or mail. The online portal often requires logging in, selecting a claims option, completing required fields, and uploading documentation.
When submitting a claim, it is important to include itemized statements that show the date of purchase, the description of the item, and the dollar amount. For fax or mail submissions, a completed reimbursement request form must accompany the supporting documentation. After submission, claims are generally processed within a few business days, with reimbursement sent via direct deposit or paper check. It is advisable to retain copies of all submitted documents for personal records.