FSA Qualified Medical Expenses Under IRC Section 213(d)

FSA qualified medical expenses are the costs your healthcare Flexible Spending Account is allowed to reimburse under Internal Revenue Code Section 213(d): anything whose primary purpose is diagnosing, treating, curing, or preventing a specific disease, or affecting a structure or function of your body. Costs that only support your general health, however sensible they are, sit outside that line. Knowing where the line falls is what keeps your FSA dollars working for you instead of turning into taxable income.

The Rule That Decides Every Question

Section 213(d) is the backbone of every eligibility call.¹ The IRS adds a practical qualifier in Publication 502: the expense must primarily alleviate or prevent a physical or mental disability or illness, and costs that are “merely beneficial to general health, such as vitamins or a vacation,” don’t count.²

When something has both a medical and a personal purpose, the medical reason has to be the dominant one. A gym membership you happened to start after a heart attack doesn’t automatically become medical. A weight-loss program a doctor prescribes to treat diagnosed obesity or hypertension does. The test is whether you can trace the expense directly to a diagnosis from a licensed provider.

Care and Services That Qualify

Professional services from licensed physicians, surgeons, dentists, and specialists are the largest category. Office visits, surgical procedures, diagnostic tests like blood work and X-rays, and hospital stays all qualify when they connect to diagnosing or treating a condition. Fees paid to chiropractors, podiatrists, psychiatrists, and psychologists meet the standard for the same reason: each treats a specific condition of the body or mind.

Acupuncture qualifies with a normal receipt. So do hearing aids, including batteries, repairs, and maintenance.² Inpatient treatment at a substance abuse facility is a qualified medical expense. Long-term care services for a chronically ill person also qualify when a licensed practitioner certifies that the person needs substantial help with at least two activities of daily living for a period of at least 90 days.³

Prescriptions, Over-the-Counter Items, and Supplies

Prescription drugs and insulin are straightforwardly eligible. The bigger change came with the CARES Act, which permanently removed the requirement that over-the-counter medications need a doctor’s prescription to qualify. Pain relievers, allergy medications, cold remedies, and antacids now qualify with just a receipt. The same legislation added menstrual care products (tampons, pads, liners, cups, and similar items) to the qualified list.⁴

Supplies and equipment used to treat or monitor a condition are covered on the same reasoning. Bandages, crutches, blood glucose test kits, thermometers, and blood pressure monitors qualify because each serves a diagnostic or therapeutic function. Durable equipment like wheelchairs, nebulizers, and CPAP machines qualifies when used to manage a diagnosed condition.

Vision and Dental

Vision care is broadly eligible. Routine eye exams, prescription eyeglasses (frames and lenses), contact lenses and their cleaning solutions, and corrective procedures such as LASIK all qualify because each diagnoses or corrects a physical impairment of the eye.² Reading glasses bought without a prescription also qualify now that the CARES Act has lifted the prescription requirement for over-the-counter health items.

On the dental side, routine cleanings, fluoride treatments, X-rays, fillings, extractions, root canals, crowns, bridges, and dentures all count. Orthodontic treatment including braces and retainers is eligible even when it spans multiple plan years. The line for dental work is the same one that runs through the rest of 213(d): the procedure must address a dental disease or structural problem, not serve a purely cosmetic purpose like teeth whitening.

Getting to Medical Care

Travel for medical care is itself reimbursable, and it is one of the most underused FSA categories. Bus, taxi, train, and plane fares qualify when the trip is primarily for medical care. Ambulance costs qualify. If you drive, you can claim either actual out-of-pocket fuel costs or the IRS standard medical mileage rate, which is 20.5 cents per mile for 2026.⁵ Parking fees and tolls at medical facilities count regardless of which method you use for the driving portion.²

Transportation costs also cover a parent accompanying a child to medical care, or a nurse or caregiver who travels with a patient who can’t travel alone. Regular visits to see a mentally ill dependent qualify when the visits are part of the treatment plan. These add up faster than most people realize, especially for anyone managing a chronic condition with frequent appointments.

Gray Areas and the Letter of Medical Necessity

Some expenses could be medical or personal depending on the circumstances, and a Letter of Medical Necessity is what tips them into the eligible column. The letter is a statement from your doctor connecting a specific expense to a diagnosed condition.

Weight-loss programs are the textbook case. General dieting doesn’t qualify. If a physician diagnoses obesity, hypertension, or heart disease and prescribes a weight-loss program as treatment, the program fees and even attendance at periodic meetings become reimbursable. Special food can qualify under similar reasoning, but only if the food doesn’t satisfy normal nutritional needs, it alleviates or treats an illness, a physician substantiates the need, and you only claim the cost above what a normal diet would run you.²

Massage therapy, ergonomic equipment, and air purifiers follow the same pattern. Without a doctor’s letter tying the expense to a specific diagnosis, your FSA administrator will deny the claim. With one, you’ve met the IRS standard. For anything that feels borderline, get the letter before you spend the money.

What Doesn’t Qualify

Gym memberships and health club dues are the most commonly attempted non-qualifying expense. Even if exercise improves your health, the IRS treats these as general wellness costs rather than treatment for a specific condition. Separate fees a gym charges for a prescribed weight-loss activity can qualify; the membership itself doesn’t.²

Cosmetic surgery is excluded when it improves appearance without meaningfully promoting the proper function of the body. Face lifts, hair transplants, electrolysis, and liposuction fall into this category. The exception is cosmetic surgery that corrects a deformity from a congenital abnormality, a personal injury from an accident or trauma, or a disfiguring disease.² Reconstructive breast surgery after a mastectomy, for example, qualifies under this exception.

Other excluded items:

Vitamins and supplements, unless prescribed by a doctor to treat a specific diagnosed deficiency.
Personal hygiene products such as toothpaste, deodorant, and shaving cream, regardless of any therapeutic ingredients.
General health items like fitness trackers, athletic clothing, and organic food.

Documentation Your Administrator Will Ask For

The IRS requires every FSA claim to be substantiated by an independent third party. Self-certification is not permitted, and a plan that allows it fails IRS requirements entirely.⁶ Administrators also cannot use sampling or set a dollar threshold below which claims go unreviewed.

A valid receipt or statement should show the name of the person who received the service, the provider’s name and address, the date of service, a description of the service or item, and the amount charged. An Explanation of Benefits from your insurance carrier is often the single easiest document that covers all of these. Credit card receipts and canceled checks alone are not enough because they show payment but not what the payment was for.

For over-the-counter items, the receipt doesn’t need to include your name, but it must clearly show the product purchased. A register receipt reading “MISC MERCH $14.99” won’t pass review at a store that also sells non-qualifying products.

If a Non-Qualified Expense Gets Reimbursed

When an FSA reimburses something that doesn’t meet Section 213(d), the reimbursed amount is added back to your gross income and becomes subject to federal income tax, Social Security tax, and Medicare tax.⁷ There is no separate penalty on top of that. The 20% additional tax sometimes mentioned in FSA discussions actually applies to Health Savings Accounts, not FSAs.⁸ You lose the tax benefit, and the money is taxed as if it had been regular wages.

Contribution Limit and the Use-It-or-Lose-It Trap

For the 2026 plan year, the maximum you can contribute to a healthcare FSA is $3,400.⁹ Your employer withholds it in equal portions from each paycheck before income and payroll taxes. The full annual amount you elected is available on the first day of the plan year, even if you’ve only contributed a fraction so far. Elect $3,400, need knee surgery in January, and the entire balance is there.

You generally can’t change your election mid-year. The IRS treats it as irrevocable once the plan year starts, with narrow exceptions for qualifying life events such as marriage, divorce, the birth or adoption of a child, or a change in employment status. A new diagnosis or a revised treatment recommendation is not enough.

Any money left in the account at the end of the plan year is forfeited unless your employer’s plan includes one of two optional protections. A plan may offer a carryover of up to $680 into the 2027 plan year, or it may provide a grace period of up to two and a half months after the plan year ends to incur new expenses against the old balance.⁷ A plan cannot offer both, and it doesn’t have to offer either. Check with your benefits administrator to know which option, if any, your plan uses.

The practical takeaway is to build your election around predictable expenses you already know are coming: annual eye exams, prescription refills, dental cleanings, an upcoming procedure. Contribute too conservatively and you leave tax savings on the table. Contribute too aggressively and you can lose money outright.

1
Office of the Law Revision Counsel. 26 U.S.C. 213 – Medical, Dental, Etc., Expenses
2
Internal Revenue Service. Publication 502, Medical and Dental Expenses
3
Office of the Law Revision Counsel. 26 U.S.C. 7702B – Treatment of Qualified Long-Term Care Insurance
4
Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act
5
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents
6
Internal Revenue Service. Chief Counsel Advice 202317020
7
Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
8
Office of the Law Revision Counsel. 26 U.S.C. 223 – Health Savings Accounts
9
FSAFEDS. New 2026 Maximum Limit Updates