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A year ago, the IRS released FAQs providing additional guidance on whether certain expenses incurred for nutrition, wellness and general health may or may not qualify as medical expenses for purposes of the Internal Revenue Code and reimbursement from health spending plans, such as FSAs, HSAs, HRAs and MSAs. The guidance indicated there may be circumstances where nutritional or wellness expenses may qualify as medical expenses, such as when they are targeted to a specific health condition/diagnosis in conjunction with a physician or other qualified medical professional. For example, FAQs provided that food and beverage costs may be recognized as medical expenses if (1) the food/beverage does not satisfy normal nutritional needs, (2) it alleviates or treats an illness and (3) the need for the food/beverage is substantiated by a physician.
Last month, the IRS issued an alert notifying taxpayers that “some companies are misrepresenting the circumstances under which food and wellness expenses can be paid or reimbursed” under these health savings plans. According to the IRS alert, companies may be informing taxpayers that a doctor’s note can transform certain expenses for nutrition, wellness, and general health into recognized medical expenses. For a fee, these companies would provide an individual with a doctor’s note based on the individual’s own self-reported health information.
The IRS Alert confirmed that this type of doctor’s note is not sufficient to transform an otherwise unreimbursable expense into a “medical expense” that could be reimbursed under an FSA, HSA, HRA or MSA. Thus, taxpayers are reminded that while medical providers may recommend and encourage taking steps to improve our overall general health, expenses associated with promoting a healthy lifestyle are generally not medical expenses for purposes of the Internal Revenue Code.