Eligible and Ineligible Expenses for FSA Accounts Note: For additional information on eligible and ineligible expenses refer to the Alphabetical Listing of Expenses or the Over the Counter Drug Reimbursement Reference. Eligible Health Care Expenses A Health Care FSA can be used to reimburse medical and dental expenses that qualify as federal income tax deductions (whether or not they exceed the IRS minimum applied to these deductions) under Section 213 of the tax code. Medical expenses that are not deductible under Section 213 may not be reimbursed by a health FSA. Expenses may be incurred by the employee or by the employee's spouse or eligible dependents (children, siblings, parents and others for whom an exemption may be claimed under Section 152 of the tax code). Examples of eligible health care expenses include: Deductibles & co-payments Health care expenses not reimbursed by your health plan Routine physicals, well-baby care etc. Eyeglasses Dental expenditures not covered by insurance or other coverage Non-covered expenses approved by the IRS Ineligible Health Care Expenses "Medical care" expenses as defined by Section 213 include amounts paid for the diagnosis, treatment, or prevention of disease, and for treatments affecting any part or function of the body. The expenses must be to alleviate or prevent a physical defect or illness. Expenses for solely cosmetic reasons generally are not expenses for medical care. Examples include face lifts, hair transplants, and hair removal (electrolysis). Also, expenses that are merely beneficial to one's general health (for example, vacations) are not expenses for medical care. Additional examples of ineligible health care expenses include: After-tax payments for long-term disability plan coverage Funeral expenses Custodial care in an institution Health club dues Weight-loss or programs not prescribed by a physician for a particular condition Cosmetic surgery Eligible Dependent Care Expenses Reimbursable dependent care expenses are expenses incurred for the care of an employee's dependent(s) so that the employee and the employee's spouse can be gainfully employed. For example: Expenses must be necessary to enable you to work. If you are married, your spouse also must work or be a full-time student for at least five months during the year. Dependents must be under age 13 or physically or mentally unable to care for themselves. They must be eligible to be claimed as dependents on your Federal Income Tax Return. If you are divorced or legally separated, a child who is under age 13 or is physically or mentally handicapped is eligible as a dependent as long as you have legal custody, even if you are not entitled to the Federal income tax exemption. Expenses for a day care center, summer day camp or preschool for your child. The facility must be licensed under state or local law if it cares for seven or more children. If the expenses are for a day care center, the center must comply with all state and local laws and provide a tax identification or social security number Expenses for an unlicensed day care center that cares for six or fewer children. Payments cannot be made to someone you claim as a dependent on you Federal Income Tax Return or to your child under age 19. But, payments can be made to a relative who is not a dependent, even if he or she lives in your home The cost of day care and housekeeping services in your home for your child or other qualifying individual. The cost of meals, regular* lunches and snacks, supplied by a daycare provider Expenses at an adult day care facility (but not expenses for overnight, nursing home facilities). If services are provided outside your home for eligible dependents over age 13 (for example, for a parent or grandparent,), the dependent must spend at least eight hours per day in your home. Ineligible Dependent Care Expenses: The Following Expenses Are Not Eligible For Reimbursement Under A Dependent Day Care FSA: Daycare for a child aged 13 or older. Expenses for any camp that includes overnight stays (expenses for summer day camp, however, may qualify if the camp meets the criteria included in IRS Publication 503) Kindergarten or school tuition (pre-school and before and after care is okay) for age 5 & older. Expenses for any care provided to a qualifying individual by the participant's dependent or child under age 19. Tuition for private school. Housekeeping expenses not related to dependent care. The same expenses for which you claim a dependent care tax credit on your federal income tax return. The registration fees paid for daycare, summer camp, kindergarten, preschool, etc. The only exception is the day camp or registration fees which are applied towards the first payable bill. These are eligible once the initial bill has been paid and the service has been provided. The cost of meals while on field trips and outings or those meals included as part of the cost of such trips. Health care expenses for a dependent. These should be considered for reimbursement through a Health Care FSA.
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