Is Petroleum Jelly an FSA Eligible Expense?
Confused about FSA eligibility for common items? Learn the key criteria and how to properly claim medical expenses.
Flexible Spending Accounts (FSAs) offer a valuable benefit, allowing individuals to set aside pre-tax money to cover eligible healthcare expenses. Navigating the rules for what qualifies as an eligible expense can sometimes be complex, leading to questions about everyday products.
Understanding FSA Eligibility
The Internal Revenue Service (IRS) defines eligible medical expenses as costs paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. This definition helps distinguish between items that are medically necessary and those used for general health or cosmetic purposes. Expenses that are merely beneficial to general health are typically not considered eligible medical expenses.
While many over-the-counter (OTC) medicines became fully eligible for FSA reimbursement without a prescription following the CARES Act in March 2020, this applies to items with active medicinal ingredients intended for specific health conditions. General health items or cosmetics usually require specific medical necessity to be considered eligible. Eligibility is determined by whether the product serves a direct medical purpose.
Petroleum Jelly and FSA Coverage
Petroleum jelly is generally not eligible for FSA reimbursement when used for common cosmetic purposes, such as a general moisturizer or lip balm, as these are considered personal care items. However, petroleum jelly can be eligible if it is specifically used for a medical purpose. For instance, it is eligible for first aid usage to treat scrapes, burns, or rashes, acting as a skin protectant.
Petroleum jelly can qualify as an FSA expense if a healthcare provider specifically prescribes it to treat a diagnosed medical condition. This might include severe eczema, chronic dry skin conditions, or wound care as part of a treatment plan. In such cases, the purchase requires a Letter of Medical Necessity (LMN) or a prescription from a healthcare provider to substantiate its medical use. If petroleum jelly contains active medicinal ingredients, it would also fall under the broader over-the-counter medicine eligibility rules.
Submitting an FSA Claim
If petroleum jelly is deemed eligible due to medical necessity, submitting a claim requires proper documentation. You will typically need a detailed, itemized receipt that includes the merchant’s name, the date of purchase, a description of the product, and the amount paid.
If the eligibility of the petroleum jelly relied on a medical prescription or a Letter of Medical Necessity, a copy of this document must accompany your claim. The LMN should specify the diagnosed medical condition, the recommended treatment, and the duration for which the item is needed. It is advisable to retain copies of all documentation and consult your specific FSA plan administrator for any unique submission requirements or forms.