Participant wants to install a Hot Tub for wife's bad back

[Guest Lisa D.]

A doctor has recommended that spouse should use hot tub to alleviate back pain. Can the employee submit this expense under the FSA plan. If this can be done under "Capital expenses" as noted in IRS Publication 502, what back up would have to be submitted to the administrator to reimburse this claim. And, If an appraisal is not receive before FSA elections are due, 12/31, can the current election be adjusted once appriasal is received?

[papogi]

I would require documentation from the doctor indicating that the hot tub is recommended. Note that he/she can only be reimbursed for the difference between the increase in home value and the actual cost of the improvement. Permanent hot tub installations increase the value of homes, so this will most likely need to be factored in. As for the appraisal (for the installation, I assume), the employee will just have to estimate. The current election cannot be adjusted based on the appraisal.