Can FSAs be used to reimburse nontraditional health care providers?


One of our employees wants to use the money in her health flexible spending account (FSA) to pay for her treatments by a holistic healer. Is this allowed?


To be reimbursed by an FSA, expenses need not be prescribed by a licensed medical physician. Services or treatments provided by other providers — such as naturopaths, holistic healers, acupuncturists, and alternative healers, such as Christian Science practitioners — may qualify for FSA reimbursement within the definition of medical care if the services or treatments otherwise meet the Internal Revenue Code Sec. 213 definition of medical care. Thus, treatments that are provided by nontraditional alternative health professionals are eligible if they are for the treatment of a specific medical condition. However, alternative treatments, medicines, and drugs that are merely prescribed for general health are not considered eligible expenses for reimbursement.

Plan administrators should take additional steps to make sure that treatments and services provided by nontraditional health care providers are being provided to diagnose, treat, alleviate, or otherwise prevent an actual medical condition. The FSA should communicate these rules to employees so they know what can be reimbursed.

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