acceptable expenses

[Guest Kimberly Crowder]

if a participant receives treatmet from a non-medical person, (such as acupuncture)does the person providing the service have to be licensed or certified to make the expenses eligible for re-imbursement?

[JWK]

I think you need to focus on the Section 213 requirements for deductible (and, hence, reimbursable) medical expenses. A couple of points are key. First, the expense cannot be for the participant's general well-being--so massages generally will not be reimbursable whether or not the therapist is licensed. Second, "illegal operations or treatments are not deductible" (reimbursable). So I think you need to determine whether your state law requires licensing of acupuncturists (or other nontraditional health practitioners) and, if it does, then you could only reimburse expenses incurred for treatment by licensed acupuncturists (or alternative providers).

Note that some states require licensing of naturopaths, while other states may prohibit the practice of naturopathy (the last information I had indicated that naturopathy was illegal in Tennessee and South Carolina).

Finally, the rules for "medicine and drugs" are stricter. Only medicine and drugs prescribed by a "physician" (basically a traditional practitioner such as an M.D., D.O., D.M.D., etc.) can be reimbursed. See Section 213(d)(3) and (4).

[Kirk Maldonado]

The test is whether the amounts are expended "for the diagnosis, cure, mitigation, treatment or prevention of disease." The practitioners need not be licensed by a State authority. The test is the nature of the services rendered, not the experience, qualifications, or title of the person rendering them. See Rev. Rul. 63-91, 1963-1 C.B. 54. I have had an extensive recent discussion with the National Office of the IRS on this very point, and they have confirmed their approval of the analysis contained in Rev. Rul. 63-91.

[JWK]

Kirk raises a good point about licensure. The key is whether the treatment is illegal not whether it's unlicensed. I think in most states that these will be synonymous, but perhaps not in all. In Oregon, for example, it's a Class C felony to practice acupuncture without a license.