Is Laser Hair Removal Covered by FSA?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their paycheck to pay for eligible healthcare expenses. Laser hair removal is a procedure that uses concentrated light to target and damage hair follicles, aiming to reduce unwanted hair growth. While often sought for aesthetic reasons, laser hair removal is generally not covered by an FSA if its purpose is purely cosmetic. However, coverage may be possible when the procedure is deemed medically necessary to treat a specific health condition.

Understanding FSA Eligibility

A Flexible Spending Account is designed to cover qualified medical expenses as defined by the Internal Revenue Service (IRS). The IRS considers “medical care” to include 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. This broad definition encompasses a wide range of services, from doctor visits and prescription medications to dental and vision care.

Generally, expenses incurred for cosmetic purposes are not considered eligible medical expenses under IRS guidelines. For an expense to qualify, it must address a specific medical condition rather than being solely for aesthetic enhancement. Therefore, procedures like purely cosmetic surgery, including most forms of hair removal, typically fall outside the scope of FSA eligibility.

When Laser Hair Removal Qualifies

Laser hair removal can qualify as an FSA-eligible expense, but only when it is medically necessary to treat a specific underlying condition. This requires a prescription from a qualified healthcare provider to alleviate a diagnosed illness or medical issue. For instance, individuals suffering from hirsutism, a condition characterized by excessive hair growth due to hormonal imbalances such as Polycystic Ovary Syndrome (PCOS), may find laser hair removal eligible. Similarly, treatment for gender dysphoria, where hair removal is part of a medically recognized treatment plan, can also qualify.

To establish medical necessity, a Letter of Medical Necessity (LMN) from a healthcare provider is required by the FSA administrator. This document must clearly state the diagnosis, explain how laser hair removal directly treats the medical condition, and specify the duration or number of treatments recommended. The LMN serves as documentation that the procedure is integral to managing a health issue, not cosmetic. Without this justification, the expense will likely be denied.

Steps for Using Your FSA

Once medical necessity for laser hair removal has been established and the required documentation, such as a Letter of Medical Necessity, is secured, you can proceed with using your FSA funds. One common method involves using an FSA debit card at the time of service. This card functions like a regular debit card, drawing directly from your FSA balance, but it can only be used for eligible expenses at merchants with an IRS-approved “Inventory Information Approval System.” Not all providers may accept FSA cards for these specific medical procedures, or the transaction might require further verification.

If direct payment with an FSA card is not feasible or is declined, you will need to pay out-of-pocket and then submit a claim for reimbursement. This process requires submitting an FSA claim form along with detailed receipts showing the service provider, date of service, and amount paid. A copy of your Letter of Medical Necessity must also be included with your reimbursement request to validate the medical purpose. Maintain thorough records of all invoices and payment confirmations. Thorough documentation helps prevent claim denials or delays.