FSA Accounts and Why I hate the IRS

I found out I was pregnant in December. About 2 days after our 2008 elections were due for things like contributing to pretax FSA.

I had been going weekly to see a super expensive fertility accupuncturist ($125 a session!) so I thought I was being on the conservative side electing to put aside $125 a month into the FSA.  That would only cover one appointment a month so there was no way I’d LOSE that money? Right?

Of course I’d much rather be pregnant than lose my FSA money, but I really didn’t think it would be an issue.. wouldn’t things like breast pumps, maternity classes etc be FSA eligible expenses?

The answer is yes and no.  But more NO.

For pumps, it needs to be considered “medically necessary” and can not be just for the “convenience” of the mother. OH PLEASE! Like there aren’t a bazillion studies that show that Breast feeding is healthier for baby and therefor pumps, or any other accoutrement that assists in BF should be a necessary medical expense.

I’ve heard that people had their OBs write them a script for pumps. I guess I can ask my midwives, but I think they’ll be baffled because they are used to working with women who have no insurance, let alone FSA accounts.

I had the brilliant idea that maybe a Doula would be covered.. that would be excellent because I could use up all my FSA money AND get a Doula!

But researching it further, the Doula has to be a “licensed medical professional and being a member of DONA doesn’t count. Plus, it’s such a grey area that you wouldn’t really know if it would be covered until AFTER you gave birth and submitted the expense, and that’s a big one with typical Doula fees being $1000-$1200 in my area.

Birthing classes are also not covered unless they specifically deal with breathing techniques like Lamaze.  I think our birthing class should be covered, but what about the breast feeding class I want to take?

The thing that makes me really angry is that things like contact lens solution and condoms are covered.

Yes, they are medical things, but aren’t contacts technically “for the convenience” of the person? I mean, they COULD wear glasses, just as “easily” as a working mom could “not pump”.

And yes, condoms prevent disease, we all know that. But so does breastfeeding.

I just can’t help but wonder if breastfeeding and childbirth were things that men and not women had to do,  would these laws be different?

Luckily with the birth of a child I can change my benefit elections so I won’t have to contribute starting the month Jasper is born until the end of 2008.  But I’ll still have about $1000 racked up.  My hospital copay for delivery will be $250, so that leaves me with $750. What to buy,  a lifetime supply of bandaids??

If you contribute to your FSA, will you have any leftover? If so, how do you plan on spending it?

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Amy says:

This is specifically directed to those frustrated that some of their pregnancy and post-pregnancy stuff isn’t covered.
I went and bought tons of supplies-all baby medications, rubbing alcohol, vicks vapo rub, digital thermometer, vaporizer/humidifier. Go to Walgreen’s website and you’ll see the tons of stuff that is covered. We all need supplies for the baby so I bought all the stuff under my FSA. Plus when you get those nasty hemroids and dryness-vaseline and all hemroid medecine is covered. Also, once you are prego-your pre-natal vitamins are covered.

Hope that helps.

mkb says:

Benefitsdude, that’s called tax fraud.

ariana says:

Benefitsdude, pretty good idea ;)

benefitsdude says:

I have been in the same boat, you can concievably purchase and return the items to avoid taking a loss.

ariana says:

Holly,
Wow, 100%? I found out our deductable will be $250, plus $70 a night for a private recovery room if there’s one available (which god, please let there be!)

I did end up getting back just this week about $650, most of it from rx copays, office visit copays, our birthing class, prenatal vitamins, iron suppliments etc. etc.

I found that for anything slightly out of the ordinary they do require that it be “medically necessary” which doesn’t mean a rx necessarily, it could just be a letter that your doc signs. For example Supplements aren’t normally covered (i.e. PNV, Iron & DHA) but I got them covered by typing up a letter that said that as I am anemic and pregnant that they are “medically necessary” and had my midwife sign it.

Same thing for my birthing class. Basically your best bet is to contact your FSA manager and ask them for the list of what is and is not covered, that will give you a much better idea.

Good luck!!

Holly says:

I totally understand your pain. I was misinformed by my husband’s HR about what our out of pocket expenses should be for the birth of our child, so I elected to save money in my FSA. I found out mid year that that we were covered at 100%, really 100%(!) for all labor and delivery costs. I am so pleased to have such rare awesome benefits, but now I am trying to come up with creative ways to spend all that money in my FSA since the IRS guidelines will not allow me to decrease or eliminate my contributions even with our family status change. Does anyone know if you need a “script” for massages for them to be covered? I really don’t want to buy 3 or so lifetime supplies of band aids to use up that money!!! Also, does anyone know if i just buy sunglasses at a eyeglasses store (ie Lenscrafters) will they be covered? I do not have a prescription for glasses…Any suggestions?

Natalee says:

I would ask your midwives for a note for the breast pump for sure. I am due August 1 and have the same rules regarding breast pumps for my FSA as well. I was anticipating a possible battle, but I asked my Dr. for a note and they acted like it was no big deal at all. They actually already have a preprinted letter that they use and then just stamp the Dr’s name when they print it.

Tricia says:

What about dental visits? That should use up some, since most insurance plans don’t cover restorative care fully, only preventive.

Melanie says:

I use FSA. I was surprised how fast we’ve gone through it. After the birth I had some complications and went through about 8 different prescriptions for antibiotics, pain meds, etc. We used it for my deductible, we use it for doctor visit co-pays for the baby. She had jaundice and had extra testing done we were able to use it for… It really added up. Also now I am using it to pay for my birth control pills. You can use it for medical stuff for the baby even if she’s not on your plan. Ours is all under my husband’s payroll, but he uses it for all of my medical stuff!

Kara Brickel says:

You should really check our the IRS regulations as they are the governing authority on FSA’s. There are many things you can use your FSA money for, you will be surprised and reimbursed alot quicker than you think.

Co-pays for visits are approved as well, so I would hang on to every reciept possible.

Congrats, you have a lot to be happy and grateful for.

Beth says:

Haha… oops… I forgot to close the italics tag. My bad!

Beth says:

You can use your money for your husband and your child, Ariana! So go for it! Well — you have a good point in wondering about Jasper being born first… but I tend to think you still could. You should check that out — but at any rate, DH is covered for sure.

If I were you, I’d ask for a script for the pumps, even if your midwives look at you strangely ;)

I love my FSA, but I can totally see why this is frustrating. There’s always so much red tape!

Sara says:

I use mine for chiro and massage, but I’ve also used it to buy a second pair of glasses and sunglasses from our HMO shop. I’ll bet they would cover chiro for the baby when he comes. I see a massage therapist in an office with a chiro — I don’t know if that makes a difference. I really think they should cover the pump. When I was pregnant, our insurance wouldn’t cover my ND or any part of the homebirth, and wouldn’t even count my prenatal appointments with her as “valid.” Apparently I had to see a “real” doctor. Ticked me off to no end. Best of luck to you!

ariana says:

Stephanie, what an ordeal!! Kudos to your employer for stepping up though, even though it didn’t help you much. God I hate insurance companies. Though in this case it’s the IRS with all the restrictions.

I don’t think lactation consultants are covered under fSA either :(

ariana says:

I don’t wear glasses, otherwise I’d definitely be all over that :) I don’t think I can use my money to cover things for DH can I? I guess if no name is on there, no one would know.. hmmm.

I’m not even sure if stuff for baby is covered either until it’s born and is my dependent.. so preparation stuff like diaper ointment may not be covered. Obviously I have to research this more.

I know prenatals are covered, but requires a “physician’s diagnosis and recommendation. What does that even mean? I have to get a “note” saying I’m pregnant and need prenatals so I can write off $12?

I’m just annoyed they make it so difficult!

Stephanie says:

Insurance companies suck.

My older daughter was born with a somewhat rare (scarily becoming less rare) disorder which made it impossible for her body to digest proteins properly. We tried everything (including me being on a really restricted diet) but even my breast milk made her dangerously sick.

After her second second week long stay in the hospital (at just five weeks old) we were forced to switch her to a prescription amino-acid based formula. Insurance refused to cover the formula, calling it a “supplement.” Of course, it’s not actually a supplement if it’s the only thing you can eat/the only thing keeping you alive.

The children’s hospital, pediatrician and GI specialist each sent letters to the insurance company explaining that the formula was “medically necessary” and without it she would continue to be hospitalized for weeks at a time, but they kept refusing to pay. (Odd, since each hospitalization was about $14,000 and the formula was *only* $45 a can.) We went through appeal after appeal and were shot down every time.

After about a year, we talked to my husband’s employer, and they were amazing – within a week of talking with us, they actually changed the company’s insurance policy so that from now on if any other employees have babies with the same condition, the formula will be covered. But in that first year, we spent over $4000 out-of-pocket on formula and up until our daughter started eating solid foods, it was the ONLY thing she could eat, so it was absolutely “medically necessary.”

So here’s the kicker: our insurance policy covers Viagra. Baby starving to death vs. erection? Um, which one is more “medically necessary?”

I wouldn’t worry too much about flex spending yet. Babies are notoriously expensive. I’m guessing, unless everything else is already covered by insurance, you might even end up spending it on Jasper in some way. For example, our insurance didn’t cover visits with lactation consultants.

Jill says:

How annoying! I don’t have an FSA, but my parents do. What about things like new glasses, contacts, prescription prenatal vitamins, OTC drugs, etc.? Things for the baby like children’s tylenol, motrin, gas drops, diaper ointment, etc. might be covered. I know it isn’t much, but it is something! If you can get a script for massages, that might work too. I know some FSAs also cover childcare, so that might be worth looking into.

Sarah says:

I’m sorry, that sucks. I was 10 weeks pg when I did mine but terrified of putting in too much baby related stuff since I’d had two prior m/cs. Anyway, I don’t think we’ll have leftover since I didn’t account for various extra tests and such. We also can’t get money for a breast pump and a doula isn’t covered. And I had to fight to get reimbursed for my birthing classes. They did not cover newborn care, breastfeeding, etc. Just the actual birth prep part of the classes.

Is it possible for you and your dh to get new glasses (I got fancy sunglasses with mine)? Or could you use it to pay for a LOT of massages?