Using tax-free dollars is the smarter way to pay medical expenses
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A guide to what qualifies for tax-free payment...and what does not
If you have questions, email support@yourflex.com or
call Benefit Solutions at 804-379-0909
The final, formal word on what qualified is in IRS Publication 501
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Important Change Regarding Over-the Counter (OTC) Medications
Starting January 1, 2011, OTC medications will require a doctor’s prescription to be eligible for FSA/HSA reimbursement.
As a result, OTC medications cannot be purchased using the YourFlex mySourceCard® after 12/31/10 unless dispensed by a pharmacy the same as a standard prescription. If a manual claim is submitted for purchase of an OTC medication after 12/31/10, a prescription receipt must be included with the claim in order to receive reimbursement.
Non-medicated OTC products (gauze pads, diabetes test strips, saline solution, etc.) are not affected by this change in the law. You can continue to receive FSA/HSA reimbursement for such items after 12/31/10 in the same manner you do now.
Use pre-tax funds from health YourFlex accounts to buy…
• Acupuncture
• Alcoholism treatment
• Allergy shots and testing
• Ambulance (ground or air)
• Artificial limbs
• Blind services and equipment
• Car controls for handicapped*
• Chiropractor services
• Coinsurance and deductibles
• Contact lenses
• Crutches, wheelchairs, walkers
• Deaf services -- hearing aid/batteries,
hearing aid animal & care, lip reading
expenses, modified telephone, etc.
• Dental treatment
• Dentures
• Diagnostic tests
• Doctor’s fees
• Drug addiction treatment & facilities
• Drugs (prescription)
• Eye examinations and eyeglasses
• Home health and/or hospice care
• Hospital services
• Insulin
• Laboratory fees
• LASIK eye surgery
• Medical alert (bracelet, necklace)
• Medical monitoring and testing
devices*
• Nursing services
• Obstetrical expenses
• Occlusal guards
• Operations and surgeries (legal)
• Optometrists
• Orthodontia
• Orthopedic services
• Osteopaths
• Oxygen/oxygen equipment
• Physical exams (except for employment-related physicals)
• Physical therapy
• Psychiatric care, psychologists, psychotherapists
• Radial keratotomy
• Schools (special, relief, or handicapped)
• Sexual dysfunction treatment
• Smoking cessation
• Surgical fees
• Television or telephone for the hear-
ing impaired
• Therapy treatments*
• Transportation (essentially and primarily for medical care; limits apply)
• Vaccinations
• Vitamins (prescription only)*
• Weight loss programs*
• X-rays
* If prescribed. Provider letter required.
Some
health items are not approved by the IRS
• Advance payment for services to be rendered
• Automobile insurance premium allocable to medical
coverage
• Boarding school fees
• Body piercing
• Bottled water
• Chauffeur services
• Controlled substances
• Cosmetic surgery and procedures
• Cosmetic dental procedures
• Dancing lessons
• Diapers for Infants
• Diaper service
• Ear piercing
• Electrolysis
• Fees written off by provider
• Food supplements
• Funeral, cremation, or burial expenses
• Hair transplant
• Herbs & herbal supplements
• Household & domestic help
• Health programs, health clubs, and gyms
• Illegal operations and treatments
• Illegally procured drugs
• Insurance premiums (not reimburseable under FSA, only PRA)
• Long-term care services
• Maternity clothes
• Medical savings accounts
• Premiums for life insurance, income protection, dis-
ability, loss of limbs, sight or similar benefits
• Personal items
• Preferred provider discounts
• Social activities
• Special foods and beverages
• Swimming lessons
• Tattoos/tattoo removal
• Teeth whitening
• Transportation expenses to & from work
• Travel for general health improvement
• Uniforms
• Vitamins & supplements without prescription
Note:
Please note that these lists are not intended to be comprehensive tax advice.
Use it or lose it
If there is any money left in your account after the run-out period has passed, any remaining amounts are lost to you and revert to the plan. This is sometimes referred to as the Use It or Lose It Rule. Therefore, be conservative and put in your account only what you are certain you will use.
Want to know more? Download IRS Publication 501 here.
Over-the-counter products you can purchase with pre-tax dollars
• Braces & supports
• Contact lens solution
• Diabetic testing supplies & equipment
• Durable medical equipment (power chairs, walkers, wheelchairs, CPAP
equipment & supplies, etc.)
• Home diagnostic (pregnancy tests, ovulation kits, thermometers, blood
pressure monitors, etc.)
• Non-medicated bandaids, rolled bandages & dressings
• Reading glasses
