Over the past years, probiotics have gained more and more recognition in alleviating a wide range of grievances and symptoms related to auto-immune and inflammatory diseases. A Flexible Spending Account (FSA) lets you save money on taxes in order to buy medications and feminine care products. But what about probiotics? Are they FSA eligible?
Probiotics are FSA eligible as long as the treatment has been recommended to you by a medical professional. In order to receive reimbursement for your probiotic expenses, you will need a Letter of Medical Necessity (LMN) signed by your doctor outlining the timeframe of probiotic treatment and how probiotics will help alleviate your symptoms.
In this post, we’ll first cover the basics of how a FSA actually in order to understand the eligibility requirements for probiotics. In the next step we need to ask ourselves if probiotics are a medication and therefore covered by the FSA.
I’ll also outline some steps to make sure that the probiotics you purchase are FSA eligible and you receive your reimbursement.
How does an FSA work?
A Flexible Spending Account or Flexible Spending Arrangement is a tax-sheltered account whose funds can be used to reimburse out-of-pocket medical expenses that are not covered by your healthcare plan.
The benefit of an FSA is that you do not pay any taxes on the amount you have in that account:
For instance, let’s say your income tax rate is 20% and you set aside $1,000 in your FSA. Usually, you would have to pay $200 in taxes on that amount but since it’s in an FSA you’ll save $200 which you’ll then be able to use for certain medical expenses.
However, your employer is not obliged to make contributions to this account. Make sure to talk to your boss or HR manager about the options your employer offers.
When purchasing medication you cannot spend money directly from your FSA. Instead, you’ll have to pay upfront and then later submit a claim for reimbursement. This can be done through your employer and should include proof of the medical expense.
What determines FSA eligibility?
Not all medication and supplements are FSA eligible. There are some restrictions on reimbursements so it’s important to make your expenses are actually covered before getting the medication.
- Account Limits: The limit of an FSA is $2,650 per year per employer. This means that if your medication expenses exceed this amount in a single they may be generally FSA eligible but you will not be able to claim your reimbursement.
- Prescription Medication: All prescription medications are FSA eligible. In order to claim your reimbursement, you will need to submit your doctor’s prescription along with the proof of expense.
- Over-the-counter Medication: With the passing of the Coronavirus Aid, Relief and Economic Security (CARES) Act, over-the-counter medications have become FSA eligible. These changes are now in effect retroactively to January 1, 2020. This means that if you had expenses for over-the-counter medication in early 2020 you may be able to claim your reimbursement now.
- Other Medical Equipment: In certain cases, other medical equipment such as diagnostic devices or crutches may be FSA eligible.
Now that we know which medication is FSA eligible and what the limitations are we’ll discuss how probiotics fit into this framework.
Are probiotics considered medication?
As we have see above strictly speaking only medications and certain medical equipment is covered by your FSA. Unfortunately, it is questionable whether probiotics fall into any of these categories.
Probiotics are regulated by the FDA not as medications but rather as food. While this classification has implications for production guidelines and also allows untested products to enter the market, it also affects FSA eligibility of probiotics.
Thus, since probiotics are not considered medications they technically cannot be FSA eligible. But don’t despair yet! There are some steps you can take to make sure you do receive your reimbursement.
How to make sure your probiotics are FSA eligible
- Check the list: The first step to make sure your probiotics and other supplements are FSA eligible is to check your pharmacies list of FSA eligible products. Most larger pharmacies and drug stores will be able to provide this. If you are planning to shop online check out this list by FSAStore.com which details helpful information about various supplements.
- Check the label: Next, check the label of the specific probiotic brand you are considering. Most drug stores will label their products with regard to FSA eligibility. Here’s an example of such a label I found that gives detailed information on how to claim your reimbursement.
- Get a Letter of Medical Necessity (LMN): In order to claim the reimbursement for your probiotics, it is absolutely necessary that you get an LMN from your medical professional. This will make probiotics FSA eligible. An LMN is simply a letter signed by your doctor verifying that probiotics are part of your treatment. Make sure to ask your doctor about this letter before purchasing probiotics.
- Get an extensive treatment plan: In addition to the LMN some FSA providers may also require an extensive treatment plan signed by your medical professional. This plan should outline exactly how probiotics will be used in the treatment of your diagnosis and how this treatment will last. Check with your employer beforehand to make sure you understand exactly what is required to claim your reimbursement.
- Cover long-term treatment: To make sure that larger quantities of probiotics (that extend past the current year) are FSA eligible get a second LMN before the end of the calendar year. This will be necessary to continue to claim reimbursements for your probiotic expenses after the current calendar year ends.
What about HSA, HRA, LCFSA, and DCFSA?
Now that we’ve extensively covered whether you can claim reimbursements for probiotics from your Flexible Spending Account, you might also wonder about HSAs, HRAs, LCFSAs and DCFSAs.
For HSA, HRA: The procedure for Health Savings Accounts (HSA) and Health Reimbursement Arrangements (HRA) is exactly the same as for FSAs. Please refer to the checklist above to make you will be able to claim your reimbursement.
For LCFSA, DCFSA: With Limited Care Flexible Spending Accounts and Dependent Care Flexible Spending Accounts probiotics cannot be reimbursed even with a Letter of Medical Necessity. Probiotics are not LCFSA or DCFSA eligible!
Flexible Spending Accounts (FSA) are a great way to save taxes on medical expenses. Unfortunately, probiotics are not directly covered by an FSA. However, it is possible to claim your reimbursement.
In order to make probiotics FSA eligible, you will need to make sure you have all the correct papers from your doctor before making the purchase. This may include an extensive treatment plan as well as a Letter of Medical Necessity (LMN).