After reading what the feds have just decided qualifies as a “medical expense,” you may think lawmakers are smoking a little something.
IRS just says the cost of an herbal remedy prescribed by a patient’s doctor to treat migraine headaches qualifies as a medical care expense for the purposes of a healthcare flexible spending account (FSA) — but only if the patient can substantiate that he or she:
- has a medical condition (disease, illness or injury)
- is purchasing the herb to treat or alleviate the medical condition, and
- wouldn’t have purchased the herb “but for” the medical condition.
That’s according to a new Information Letter that reminds employers that individuals must use funds from a FSA for medical care — the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting a structure or function of the body.
Should you face a similar situation at your company, it may help to ask the employee to get a letter of medical necessity form from the employee’s doctor, then review it to determine if it clearly and fully describes the circumstances.
Read Info Letter 2010-0080 here.