06/23/2017

Dual Purpose Expenses and Notes of Medical Necessity

Pretax spending accounts reimburse many expenses including co-pay, deductible and prescription expenses. These items are typically eligible with standard documentation and nothing additional is needed.  However, there are several expenses that are considered dual purpose, and require additional documentation in order to be reimbursed.

Dual purpose expenses are those items that promote overall health and well-being and can also be used due to treat a specific medical condition. Examples include vitamins, supplements, and massage therapy.  The IRS has indicated that certain items that are considered dual purpose may be eligible for reimbursement with a note of medical necessity.

A note of medical necessity is written by a doctor and lists the specific medical condition as to why the expense is needed. The note should also indicate the length of time the doctor recommends the expense be incurred.  For example, a doctor may provide a note that recommends a patient take calcium daily to help treat osteoporosis.  The note  can then be submitted with the expense the participant is claiming.

IRS Code Section 213(d) outlines eligible expenses for pre-tax plans. Also, participants can refer to the Summary Plan Description for their specific plan to confirm what expenses are eligible for reimbursement.

BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.