Air Conditioner: HSA Eligibility

Air conditioner reimbursement is eligible with a Letter of Medical Necessity (LMN) from a physician with a flexible spending account (FSA), health savings account (HSA) or a health reimbursement arrangement (HRA). Air conditioner reimbursement is not eligible with a limited care flexible spending account (LCFSA) or a dependent care flexible spending account (DCFSA).

How does air conditioning treat medical conditions?

Air conditioning regulates temperature in an indoor space, and some air conditioner designs may contain air filters that purify air to remove dust, allergens and other particulates. While air conditioners are not designed exclusively to treat a specific medical condition, the IRS will allow individuals and families to cover the cost of an air conditioner, if certain conditions are met.

Air conditioning reimbursement or a tax deduction is related to the device's ability to help alleviate symptoms for those who suffer from allergies or other respiratory illnesses. Running an air conditioner allows individuals to keep their windows closed and prevent an influx of outdoor allergens, while keeping the home comfortable at the same time. Additionally, those who live in warmer climates and suffer from lung-related conditions can experience difficulties due to poor air quality in these areas, so air conditioners can play a role in helping treat their conditions and improving their quality of life.

How is air conditioning reimbursement eligible?

The primary purpose of the air conditioner must be to treat or alleviate a medical condition. To show that the expense is primarily for medical care, a note from the medical practitioner recommending the item to treat a specific medical condition is normally required. If that is attached to a home (such as central air conditioning), only the amount spent that is more than the value added to the property will qualify.

In most cases, a benefits administrator will require a Letter of Medical Necessity (LMN) from a physician to be eligible for FSA, HSA and HRA reimbursement to prove that the device is medically necessary to treat a specific medical condition. This letter must outline how the air conditioner will be used to alleviate the issue and how long the treatment will last. Additionally, capital expenditures, or those relating to the repair, operation or maintenance of the air conditioner, may be eligible for reimbursement as well and must be mentioned in the LMN.

Eligibility Table

Flexible Spending Account (FSA) Limited Care FSA Dependent Care FSA Health Savings Account (HSA) Health Reimbursement Account (HRA)

Eligible

Eligible with Rx

Eligible with LMN

Not Eligible

Specifically Not Covered

Air conditioner for general use not eligible.

Legal Information / Regulations

Treas. Reg. '1.213-1(e)(1)(iii), Private Letter Ruling 8009080

 


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