IRS Qualified Expenses: FSA and HSA Eligibility

Short answer

The IRS calls this a "qualified medical expense," and Publication 502 defines it as the cost of diagnosing, curing, mitigating, treating or preventing a disease. That single test decides every ruling on this page: a purchase passes it outright, passes only with a letter naming a diagnosed condition, or fails it.

The same test applies whether the account is an FSA, an HSA or an HRA. What differs is what happens to money left over. An FSA's "use-it-or-lose-it" rule applies to FSA balances only, with just a capped carryover. An HSA balance carries forward without a deadline, and an HRA follows its own plan design. Filing works the same way across all three: Burst requests a letter when needed, files the claim with the administrator, and the administrator pays the money back to you.

How the IRS Defines a Qualified Medical Expense

Every ruling below traces back to one legal test, not a shopping list. Section 213(d) of the tax code defines a medical expense, and the IRS applies it in Publication 502.

The IRS defines medical expenses as "the costs of diagnosis, cure, mitigation, treatment, or prevention of disease." That standard is broad by design. It reaches doctor and hospital visits, prescriptions, therapy, dental and vision care, medical equipment, and many products sold without a prescription.

The test does not care what aisle an item is shelved in. It cares whether the cost diagnoses, treats or prevents a condition, and whether insurance already paid for it. The identical product can land in a different outcome for two buyers, depending on why each is buying it.

Applying that test consistently rules a few things out no matter who is asking: general wellness with no diagnosed condition, cosmetic work, and ordinary food, clothing or toiletries. It also rules some things in that a plain list would miss. A gym membership passes if a clinician ties it to a diagnosed condition, a supplement passes if a clinician names it as treatment, and a fitness device passes if it treats a specific health issue. For FSA and HRA accounts, the plan document and administrator apply the test to your claim. An HSA applies the same IRS test with no plan document in between.

What Does "FSA Approved" Really Mean?

People search that phrase, but there is no official list from the IRS or from any administrator. What the phrase is really asking is whether a purchase is eligible under Section 213(d): reimbursable outright, reimbursable with a letter, or not reimbursable.

The Three Outcomes of the IRS Test

Everything you might buy lands in one of three outcomes under Section 213(d), which tells you what to do before you buy.

Reimbursable outright

The item itself is a qualified medical expense under IRS Publication 502, no letter required. Doctor visits, prescription drugs, hearing aids, eyeglasses, dental work and most over-the-counter medicines pass this way, as long as insurance has not already paid for them.

Reimbursable with a letter

The purchase clears the test only when a licensed clinician documents a diagnosed condition and states in one line how the item treats it. Strip out the diagnosis, and if the honest reason is wellness, appearance, convenience or energy, the purchase fails the test. The letter has to be dated on or before the purchase it covers, so request it before you buy.

Not reimbursable

The purchase sits outside Section 213(d): cosmetic, general wellness, or unrelated to healthcare. No letter moves it into a different outcome.

Where the Plan Document Changes the Answer

Section 213(d) sets the floor for every plan, but for FSA and HRA accounts, the plan document decides how a given employer applies it, including run-out periods and what counts as covered. Two employers can treat the identical purchase differently. An HSA skips that layer: its owner answers to the IRS test directly.

Take a gym membership. The IRS text is blunt: "You can't include in medical expenses health club dues or amounts paid to improve one's general health." That rules out dues paid for general fitness. It does not rule out a membership a clinician certifies as treatment for a diagnosed condition such as diabetes or back pain, since that purchase now meets the test. Some FSA plans still cap wellness spending beyond the IRS baseline. Others do not. Burst files the claim with the letter, and the plan document has the final word.

The same layering applies to a topical pain-relief cream: it passes outright under the CARES Act, no prescription or letter needed, but a specific FSA plan can still limit reimbursement to prescription drugs. Burst files the claim either way, and the plan document decides.

OTC and pharmacy

These items pass the test two ways. An over-the-counter drug or medicine has passed on its own since the 2020 CARES Act. No prescription and no letter stand between you and reimbursement for a pain reliever, an allergy pill, a cold remedy, an antacid or a sleep aid. A supplement passes only when a clinician's letter ties it to a diagnosed condition, since a vitamin or protein powder bought for general health skips the diagnosis-and-treatment half of the test. Insulin and other prescribed drugs have always cleared it.

Personal care and hygiene

Sunscreen and menstrual products cleared the test in 2020 when the CARES Act named them expressly. A general toiletry such as deodorant, shampoo or soap never clears it, because personal hygiene is not diagnosing, curing, mitigating, treating or preventing a disease.

A diaper for a healthy infant fails the same way personal care does. A diaper for incontinence or disease passes, outright when the medical need is obvious and with a letter when it is not.

Ordinary dental hygiene, a toothbrush, toothpaste, floss or mouthwash, is a personal expense the IRS excludes the same way it excludes deodorant and soap. An electric toothbrush is different: with a letter naming a diagnosed gum condition such as gingivitis, it passes as treatment rather than routine hygiene.

Vision and dental

Vision and dental costs clear the test outright because they treat a physical condition of the eyes or teeth, not appearance. The IRS specifically covers dental care "for the prevention and alleviation of dental disease." The same reasoning reaches eye exams, prescription eyewear, corrective surgery, contact lens solution and reading glasses. A vision procedure that only changes appearance drops into the cosmetic outcome instead.

Medical devices and equipment

A device clears the test outright when its purpose is inherently medical rather than general wellness. The IRS names "hearing aid and batteries, repairs, and maintenance needed to operate it" as one example. The same reasoning covers a blood pressure monitor, a glucose meter, a pulse oximeter, a thermometer, CPAP equipment, a nebulizer and a mobility aid. A tracker built for general activity needs a diagnosed condition and a letter behind it, and sits in a different table below.

Fitness and wellness

Every row above shares one reason for needing a letter: improving general fitness or comfort does not meet the diagnosis-and-treatment half of the test. Once a clinician names a specific condition, the same purchase stops being general wellness and starts being treatment, clearing the test like a piece of medical equipment.

A gym membership, class, trainer, massage or wellness device passes with a letter when a clinician names the condition it treats, such as type 2 diabetes, arthritis, back pain, anxiety or insomnia.

Medical services and professional care

Professional care is the clearest case of the test: a doctor, a hospital, a therapist or a lab is already diagnosing, treating or preventing a disease. Doctor visits, hospital and urgent care, physical and occupational therapy, mental health therapy and psychiatry, acupuncture, chiropractic care, lab work and vaccines all clear it outright. A weight-loss program is different: it passes only with a letter naming a condition such as obesity, though the food or meal replacements themselves do not.

Family and dependent care

Section 213(d) does not stop at the account holder. A spouse's or dependent's costs run through the identical test and land in the same three outcomes as your own: outright, with a letter, or not at all. A child's doctor visits, dental work, vision care and prescriptions all pass if the parent or guardian holds the account.

A dependent care FSA sits outside this entirely. It pays for childcare and elder care, not medical costs. A dependent's medical costs run through your health FSA, HSA or HRA instead.

How reimbursement works

Once the test says a purchase qualifies, Burst handles the paperwork. For a letter case, Burst requests the letter from a licensed clinician, then files the claim with your FSA, HSA or HRA administrator. The administrator checks the claim against the same IRS test and your plan document, then pays the money back to you by deposit or check. If the administrator pushes back, Burst writes the appeal.

Timing only matters for the letter cases above. For anything reimbursable outright, you can request reimbursement anytime after the purchase. If no letter is issued, there is no charge. If the administrator denies the claim, you get the money back.

Getting it reimbursed with Burst

Here's the practical route. Request a letter of medical necessity from Burst ($35 once, about two minutes). A licensed clinician reviews it and it's typically in your inbox within 24 hours. Burst files the reimbursement claim with your FSA, HSA or HRA administrator, who pays you out of your account by deposit or check. If there's no letter there's no charge, and a denied claim means your money back. The letter has to be dated on or before the purchase it covers, so do this step first.

Request my letter for $35

Frequently asked questions

What is an IRS qualified medical expense?

Medical expenses are "the costs of diagnosis, cure, mitigation, treatment, or prevention of disease" under Section 213(d). That covers doctor visits, prescriptions, dental and vision care, medical equipment, and items that treat a diagnosed health condition.

What qualifies as an HSA expense?

The same Section 213(d) test used for an FSA: the cost has to diagnose, cure, mitigate, treat or prevent a disease, and insurance must not have already paid for it. An HSA has no employer plan document narrowing that test, so a purchase that clears it outright or with a letter clears it the same way for an HSA.

Do I need a prescription for over-the-counter medicine?

No. The CARES Act of 2020 made over-the-counter medicines like pain relievers, allergy medicine, cold medicine, antacids, and sleep aids reimbursable outright, without a prescription or letter.

Can I use my FSA for a gym membership?

Yes, with a letter of medical necessity from a clinician naming a diagnosed condition it treats, such as diabetes, arthritis, or back pain.

Are supplements and vitamins reimbursable?

Yes, with a letter, when a medical practitioner recommends them as treatment for a specific diagnosed condition.

What is not reimbursable?

Cosmetic procedures (Botox, fillers, laser hair removal), general wellness items without a condition, food and clothing, general toiletries (deodorant, shampoo), and weight-loss food are not reimbursable under any circumstance.

Does the plan document override the IRS rules?

For FSA and HRA accounts, yes, the plan document governs specifics like which items are covered and carryover rules. For HSA accounts, the IRS rules apply directly. In all cases, Burst files the claim, and the administrator decides based on the rules that apply.

Keep reading: Complete List of FSA Eligible Items, Complete List of HSA Eligible Items, What Can I Use My FSA Funds On?, What Can I Use My HSA Funds On?, and all guides on this topic.

Sources

• IRS Publication 502 - Medical and Dental Expenses (qualified medical expense definition, item rulings for OTC drugs, cosmetic surgery, supplements, weight-loss programs, health club dues, diapers, toothbrushes, hearing aids, eyeglasses, dental treatment, capital improvements)

• IRS Publication 969 - Health Savings Accounts and Other Tax-Favored Health Plans (FSA account definition and annual spending rules, FSA carryover and grace period, HRA employer-funding and account governance, HSA account definition, HSA balance treatment)