Is Sunscreen an FSA-Eligible Expense?

Flexible Spending Accounts (FSAs) offer a valuable opportunity for individuals to save money on eligible healthcare expenses using pre-tax dollars. These employer-sponsored benefits allow participants to set aside income before taxes, reducing their taxable income. A common question concerns the eligibility of everyday health products, such as sunscreen, for FSA reimbursement. This article clarifies the specific rules and conditions under which sunscreen can be considered an eligible expense, helping consumers navigate their FSA benefits.

Sunscreen Eligibility Criteria

Sunscreen qualifies as an FSA-eligible expense when it meets criteria from the Internal Revenue Service (IRS) and the Food and Drug Administration (FDA). It must be an over-the-counter (OTC) medicine intended for preventing sun-related skin damage, including safeguarding against sunburn and reducing the risk of skin cancer. For a product to be eligible, it must offer broad-spectrum protection, meaning it effectively blocks both UVA and UVB rays.

A minimum Sun Protection Factor (SPF) is also required. Sunscreen products must have an SPF of 15 or higher to qualify for FSA reimbursement. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, expanded eligible OTC items by removing the prescription requirement for many products, including qualifying sunscreens.

Using Your FSA for Sunscreen Purchases

Using FSA funds for sunscreen purchases involves straightforward steps and careful documentation. Many FSA plans provide a dedicated debit card, which can be used directly at the point of sale, whether in a store or online, to pay for eligible items. This method allows immediate use of pre-tax funds, simplifying the transaction process as the amount is automatically deducted from the FSA balance.

It is important to retain itemized receipts for all FSA purchases, regardless of the payment method. These receipts should clearly display the product name, the date of purchase, and the total amount paid. This documentation is crucial for IRS audits or for submitting claims for reimbursement if an FSA debit card was not used. If a debit card is unavailable or declined, individuals can pay out-of-pocket and then submit a claim to their FSA administrator for reimbursement, attaching the necessary itemized receipts. A Letter of Medical Necessity (LMN) is not required for standard eligible sunscreen. However, maintaining thorough records supports reimbursement requests and demonstrates compliance with IRS guidelines.

Identifying Ineligible Sunscreen Products

Not all products containing sun protection are eligible for FSA reimbursement, particularly those where the primary intent is not medical. Sunscreen products with an SPF rating below 15 are not covered. Products that are primarily cosmetic in nature, such as tanning lotions, self-tanners, or general beauty products that only include a minimal SPF as an incidental ingredient, do not qualify.

The distinction between medical prevention and cosmetic enhancement is a key factor in determining eligibility. If a product is marketed mainly for aesthetic benefits without a clear focus on medical sun protection, it will likely be deemed ineligible. Even some products with an SPF of 15 or higher might be disqualified if the brand’s overall product line is not focused on suncare, or if the product’s marketing emphasizes cosmetic rather than protective benefits. Understanding these distinctions helps consumers avoid using FSA funds on non-eligible items, ensuring compliance with tax regulations.