Hi, I'm Shubhi, one of the co-founders at Burst. We get more questions about HSA and FSA eligibility than anything else, so this is the comprehensive reference I wish existed when I first started learning the rules.

Short answer. The IRS sets HSA and FSA eligibility through Publication 502, supplemented by Notices 2006-69 and 2007-2 (which govern the IIAS card-rail substantiation system) and the CARES Act of March 2020 (which expanded over-the-counter eligibility and made period products default-eligible). Within that framework, expenses fall into three categories: (1) default-eligible (no paperwork needed), (2) eligible with a Letter of Medical Necessity (the largest category, where most of the value lives), and (3) not eligible regardless. The line between categories 2 and 3 hinges on whether a licensed clinician will document the medical context. Below is the complete walkthrough — the categories, the products, the process, and the common edge cases.

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The three categories of FSA/HSA expense

Category 1: Default-eligible (no LMN needed)

These expenses reimburse without any documentation beyond the receipt. You can pay with your FSA/HSA card directly at most retailers, or pay with another card and submit the receipt to your plan administrator.

• Prescription medications

• Doctor visits, copays, and deductibles

• Dental care, vision care, glasses, contacts

• Most over-the-counter medications (Tylenol, Advil, allergy meds, antacids — expanded under CARES Act)

• Period products (tampons, pads, cups, period underwear) — CARES Act 2020

• Prenatal vitamins, breast pumps, breast pump accessories

• First aid supplies (bandages, antiseptics, thermometers)

• Sunscreen with SPF 15+

• Reading glasses (without prescription)

• Pregnancy tests, ovulation tests

• Most lab tests, X-rays, MRIs, CT scans

• Mental health visits and copays

• Physical therapy and occupational therapy

• Acupuncture and chiropractor visits when prescribed

• Smoking cessation programs and products

Category 2: Eligible with a Letter of Medical Necessity

This is the largest category — and where most people leave money on the table because they don't know the LMN process. Examples:

• Fitness equipment (Peloton, Tonal, Mirror, NordicTrack, Hydrow, treadmills, rowers, walking pads)

• Mattresses and adjustable bases

• Saunas and cold plunges

• Recovery tools (Theragun, Hyperice, red light therapy panels)

• Wearables (Whoop, Garmin, Apple Watch, Fitbit, Coros, Wahoo)

• Most non-multivitamin supplements (when documented)

• Air purifiers and humidifiers (with respiratory or skin condition)

• Water filters (with documented contamination context)

• Specialty orthopedic shoes

• Gym memberships, Pilates, yoga (with documented context)

• GLP-1 medications when prescribed for non-default contexts

• Marathon and endurance race entries (with documented cardiac rehab context)

Category 3: Not eligible regardless

• General health-and-wellness products without a clinical context

• Cosmetic procedures (Botox for vanity, hair restoration without alopecia diagnosis)

• Toothpaste and personal hygiene basics

• Vitamins for general wellness (multivitamins are an exception)

• Health club initiation fees (the membership itself can be eligible with LMN; one-time joining fees usually aren't)

• Diet foods and meal-replacement products without medical food classification

• Branded apparel and merchandise from any health brand

• Travel for general wellness

What an LMN actually is

A Letter of Medical Necessity is a brief note from a licensed clinician documenting that a specific product or service is part of how you're managing a specific health situation. The IRS rule (under the broader Section 213(d) framework) is that any product treating, mitigating, or alleviating a medical condition is reimbursable when documented.

The LMN must:

• Name the specific health situation (not generic "wellness")

• Connect the product or service to managing that situation

• Be signed by a licensed clinician

• Be dated (typically valid for 12 months)

How reimbursement actually flows

Two paths:

• Direct card swipe. For default-eligible items, your FSA/HSA debit card processes automatically at participating retailers (Target, CVS, Walmart, Amazon's FSA Store, FSA Store, HSA Store).

• Submit and reimburse. For LMN-required items, pay with any card. Then submit the receipt + LMN to your plan administrator (Optum, HealthEquity, Fidelity, HSA Bank, PayFlex, Navia, WEX, FSAFEDS, Bank of America). The reimbursement lands in your bank account.

The IIAS / SIGIS background (advanced)

If you've ever wondered why some retailers process your FSA card automatically and others don't, it's because the IRS Notice 2006-69 created the Inventory Information Approval System (IIAS). Retailers that meet IIAS standards (verified by SIGIS, the industry consortium) can auto-substantiate eligible items at checkout. Most major retailers do. Smaller or specialty retailers don't, which means even default-eligible items there require manual reimbursement.

Year-end deadlines

FSA funds typically expire at year-end with these exceptions:

• Some plans offer a 2.5-month grace period (deadline March 15 of the following year)

• Some plans allow up to $640 (2026 limit) carryover to the next year

• Some plans do neither — pure use-it-or-lose-it

HSAs have no expiration. Funds roll over indefinitely and can be invested.

FAQ

What's the difference between HSA and FSA?
HSA: requires high-deductible health plan, you own the account, funds roll over and invest. FSA: employer-sponsored, lower contribution limits, mostly use-it-or-lose-it.

Can I have both an HSA and FSA?
You can have an HSA and a Limited Purpose FSA (LPFSA) for dental and vision. You can't have a regular FSA and an HSA simultaneously.

What's the 2026 contribution limit?
HSA: $4,400 individual, $8,750 family. FSA: $3,300 individual.

Are gym memberships HSA eligible?
With a Letter of Medical Necessity, yes. Without one, no.

Can I use my HSA for my spouse or kids?
Yes — HSAs cover spouses and tax dependents.

Is the LMN fee itself FSA/HSA eligible?
Yes.

Stop leaving money on the table

If you're already spending on health-related products that need an LMN, get one. Around 30% pre-tax savings on every eligible purchase. Burst clinicians write LMNs in under 5 minutes.

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If you're not sure whether your situation fits, hit reply on any Burst email or write to support@getburst.com. We read every email ourselves.

Thanks,
Shubhi
Co-Founder at Burst

For the underlying rules, see IRS Publication 502, IRS Notice 2006-69, and IRS Notice 2007-2.

Last updated: May 2026

This guide is not medical advice. Your eligibility depends on your specific situation and your plan administrator's interpretation of IRS rules. Burst's clinicians make eligibility decisions on a case-by-case basis.