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IRS Information Letter Addresses Code § 213 Medical Care Requirements



IRS Information Letter 2019-0005 (Dec. 18, 2018)

Available at

The IRS has released an information letter addressing the requirements for an expense to qualify as medical care under Code § 213. The letter responds to a request for guidance on whether menstrual care products are reimbursable under health FSAs, HSAs, and other tax-favored accounts. Declining to answer the specific question, the letter instead provides general information about how to determine whether an expense is for medical care, explaining that Code § 213 defines medical care as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or function of the body. In addition, medical care expenses must be paid primarily for the prevention or alleviation of a physical or mental defect or illness; personal, family, or living expenses must meet this requirement to qualify for reimbursement.

According to the letter, factors to consider when determining whether a personal expense was incurred for medical care include—(1) the motive or purpose for the expense, (2) whether a physician has diagnosed a medical condition and recommended the item as treatment or mitigation, (3) the relationship between the treatment and the illness, (4) the treatment’s effectiveness, and (5) the proximity in time to the onset or recurrence of a disease. A personal expense generally will be considered an expense for medical care only if the taxpayer would not have incurred the expense but for the taxpayer’s disease or illness. Expenses incurred to preserve general health or alleviate physical or mental discomfort that are unrelated to a particular disease or defect are not medical care expenses. As for menstrual products, the letter recommends considering the following to determine whether they are for medical care: whether they are purchased to treat, mitigate, or diagnose a disease; whether they are merely beneficial to general health such that they might be considered a personal expense; and whether their cost would not have been incurred but for a medical condition.

EBIA Comment: This IRS information letter does not break new ground or include any surprises. But like other recent IRS information letters (see, for example, our Checkpoint article), it may be helpful to those on the front lines of health FSA, HSA, or HRA administration, who are sometimes asked to explain the reasons for plan operating rules and decisions. While not official guidance, the federal government’s flexible benefit plan treats menstrual products as ineligible for reimbursement, and in our experience, most plans take the position that menstrual products ordinarily are used to maintain general health and are not eligible for reimbursement. There may be exceptions, however (e.g., if a medical practitioner recommends them for use after childbirth or surgery), and legislation has been introduced that would amend the Code to treat menstrual products as reimbursable (see, e.g., H.R. 1882). For more information, see EBIA’s Cafeteria Plans manual at Sections XX.D (“Expenses Reimbursed Must Be for Medical Care”) and XX.M (“Table of Common Expenses, Showing Whether They Are for ‘Medical Care’”). See also EBIA’s Consumer-Driven Health Care manual at Sections XV.C (“What Is an HSA-Qualified Medical Expense?”) and XXIV.B (“HRAs May Reimburse Only Code § 213(d) Expenses”).

Contributing Editors: EBIA Staff.

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