Cosmetics: HSA Eligibility

Cosmetics are not required for the treatment, diagnosis or prevention of a medical condition, and therefore are never eligible with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), limited care flexible spending account (LCFSA) or a dependent care flexible spending account (DCFSA).

Why aren't cosmetics eligible for reimbursement?

In accordance with IRS regulations regarding taxable medical deductions, IRS 213(d) is especially relevant in regards to the eligibility of certain over-the-counter (OTC) products like cosmetics. Under IRS 213(d), medical care refers to:

"The term "medical care" means amounts paid for the diagnosis, cure, mitigation, treatment or prevention of a disease, or for the purpose of affecting any structure or function of the body."

This particular definition is vital in helping benefits administrators determine whether a specific medical procedure or OTC product is eligible for reimbursement through consumer-directed healthcare accounts like FSAs, HSAs and HRAs. Cosmetics have no role in medical care or use for "general health" purposes, and they are primarily manufactured and used by those wishing to improve their physical appearance. As such, cosmetics are not eligible for reimbursement through consumer-directed healthcare accounts.

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

 


AZ-PROD-WEB02 11/18/2017 9:56:59 AM