Reimbursable expense under a health FSA

[Guest Nini]

We have been contacted by a participant to see if sun-protective clothing is reimbursable under a health fsa; this individual has developed an allergy to the sun and needs special clothing.

The only thing we are able to find is the eligible expense under FSAFEDS and it states the following -

Sun Protective Clothing

Clothing that offers at least 30+ UVA and UVB sun protection for individuals with melanoma, or other skin cancer, systemic lupus erythematosus (SLE) or other significant dermatologic condition may be eligible with a letter of medical necessity from your doctor. The clothing is reimbursed for the difference between "normal" apparel and this specially constructed clothing up to 33% of the total cost. The receipt must show the purchase was from an accredited sun protective company such as Solumbra or Coolibar.

There is nothing in the plan document that would prevent this type of reimbursement.

We already looked at Pub. 502 and did not see a reference.

Has anyone had any experience with this - if you have some ideas, please let us know - citations would be appreciated.

Thanks.

[LRDG]

Sec. 213 describes expenses deductible from individual income tax returns due to medical necessity. It covers special diets and clothing, medically necessary home improvement/construction cost and the degree to which the cost is deductible from taxable income.

Sec. 213 is referred to in Sec. 125 for purposes of defining medically necessary expenses eligible for exclusion from income under a Sec. 215 plan, as well as medically necessary and eligible for deduction from taxable income when filing individual income tax returns.

One exception that comes to mind is Sec. 125 plans allow exclusion from income for medically necessary expenses described in Sec. 213 from first dollar spent on medical care. However, when filing individual income tax return for medical expense deductions, Sec 213 states expenses must exceede 7.5% of taxable income.

Clothing, home improvements and food are not tax deductible. The additional cost for medically necessary diet, clothing, that exceed a regular diet or regular clothes for instance, is deductible when filing income tax returns, or excludible from taxable income under a Sec. 125 plan.

Medically necessary home improvements are deductibel only to the extent that the cost exceeds capital gains.

[Guest Nini]

Thanks for the information - do you know where the 33% of cost comes from?

[LRDG]

I'm not familiar with FSAFEDS. Sounds like it could be a federal govt., SPD for a FSA.

Wish I had a link for you to Sec. 213.