IRS Issues Reminder on Appropriate FSA and HSA Medical Expenses

The IRS has released an alert reminding taxpayers that personal expenses for general health and wellness are not considered medical expenses for flexible spending account (FSA) and health savings account (HSA) purposes, and that reimbursement of non-medical expenses results in the arrangement no longer being qualified and all disbursements being includible in income. The alert suggests that some companies mistakenly claim that notes from doctors based merely on self-reported health information can convert-non-medical food, wellness and exercise expenses into medical expenses.

Account owners are encouraged to review IRS frequently asked questions if clarification is needed on what is a medical expense.