IRS Updates Medical Expense FAQ related to Nutrition, Wellness, and General Health

AT A GLANCE

• The IRS issued an updated FAQ addressing certain costs related to dual-purpose expenses including nutrition, wellness, and general health.
• The FAQs confirm that these expenses are covered under spending accounts, if purchased for the treatment or prevention of a disease or illness.
• The recently released guidance does not present any new rules or concepts, but are helpful reminders for employers and participants.
• The FAQ is available on the IRS Website

IRS FAQ Updated

The IRS published additional FAQ on their website on March 17, 2023 addressing if certain costs related to nutrition, wellness, and general health care are eligible medical expenses, reimbursable under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA) or health reimbursement arrangement (HRA).

The FAQs address dual-purpose items, including nutritional supplements, non-prescription drugs, smoking cessation programs, and gym memberships and reiterate that these items may be eligible for reimbursement if they are incurred for diagnosis, cure, mitigation, treatment, or prevention of disease. The guidance also confirms the existing position that purchase of these items for a person’s general health and wellbeing would not make them eligible as a medical expense.

The IRS guidance does not change the plan participants responsibilities to provide substantiation documentation, including a Letter of Medical Necessity, when submitting these types of claims.

• For more information about whether costs related to nutrition, wellness and general health are medical expenses, see Publication 502, Medical and Dental Expenses, and Tax Topic 502, Medical and Dental Expenses.
• For more information about HSAs, FSAs, Archer MSAs and HRAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.

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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.