Is Lice Treatment an FSA Eligible Expense?
Discover if common health treatment expenses, like lice care, are eligible for coverage through your Flexible Spending Account (FSA). Learn how to navigate eligibility and reimbursement.
Flexible Spending Accounts (FSAs) allow individuals to set aside pre-tax money for eligible medical expenses. This article clarifies the eligibility of lice treatment expenses under an FSA, outlining which products and services are covered and the process for claiming reimbursement.
Understanding FSA Eligibility for Medical Expenses
The Internal Revenue Service (IRS) defines what constitutes a qualified medical expense for FSA purposes. According to IRS Publication 502, medical expenses are costs primarily incurred for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” This definition ensures that only expenses directly related to medical care are eligible, distinguishing them from costs associated with general health improvement or cosmetic procedures.
Specific Lice Treatment Eligibility
Lice treatment expenses are generally eligible for reimbursement through a Flexible Spending Account because they address a recognized medical condition. Both prescription and many over-the-counter (OTC) medications used to eliminate lice qualify. Prescription-strength solutions, such as shampoos, lotions, or oral medications specifically prescribed by a healthcare professional for lice infestation, are covered. Examples of such medications include Malathion, benzyl alcohol lotion, ivermectin lotion, spinosad topical suspension, and lindane.
The CARES Act of 2020 expanded eligibility, making numerous over-the-counter lice treatment products reimbursable without requiring a prescription. This includes topical treatments like permethrin-based products (e.g., Nix) and pyrethrin-based shampoos and creams (e.g., Rid). Lice removal combs are also eligible when sold as an integral part of a complete treatment kit.
Professional lice removal services performed by licensed medical professionals or as part of a treatment plan are also typically eligible for FSA reimbursement. However, general hygiene products, household cleaning supplies, or preventative sprays not specifically intended as direct treatment for an active infestation are not eligible. Standalone combs or essential oils marketed for prevention without an approved active ingredient for treatment also do not qualify.
Claiming Reimbursement for Lice Treatment
Obtaining reimbursement for eligible lice treatment expenses from an FSA requires submitting appropriate documentation to your plan administrator. Acceptable documentation includes itemized receipts or an Explanation of Benefits (EOB) from your insurance provider. These documents must clearly show the patient’s name, the provider or merchant’s name, the date of service or purchase, a description of the service or product, and the dollar amount. While many OTC items no longer require a prescription post-CARES Act, retaining a doctor’s note or prescription for certain items can still be beneficial if your specific plan requires it.
Many FSA plans provide a dedicated debit card that can be used at the point of sale, which frequently results in automatic approval without further documentation. Alternatively, you can submit claims manually by logging into your FSA provider’s online portal and uploading digital copies of your supporting documents. Some administrators also accept claims via mail using a paper claim form. Regardless of the submission method, maintaining thorough records of all expenses and corresponding reimbursements is important for your personal files and for potential audits.