IRC §213(d) defines what qualifies as a medical expense for tax purposes.
This definition is the foundation for determining what can be reimbursed or paid under HRAs, HSAs, FSAs, and ICHRAs.
These rules apply generally, but each account type has its own limitations and design rules that may narrow what is actually allowed.
(See: HSA Eligible Expenses, HRA Eligible Expenses, FSA Eligible Expenses, ICHRA Eligible Expenses.)
The Statutory Definition
A §213(d) medical expense is one paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body.
This includes medical, dental, vision, mental health, and certain preventive care services. The expense must be primarily for medical care, not for general health or personal comfort.
Core Principles of 213(d)
Medical Purpose Requirement
To qualify, the expense must have a clear medical reason.
Examples:
- Treatment of an injury or condition
- Diagnostic testing
- Preventive care
- Services provided by licensed medical professionals
Non-qualified examples: cosmetic procedures, purely personal items, general wellness.
Cosmetic vs. Medical Distinction
Cosmetic procedures are not 213(d) unless required to restore function or correct deformity due to:
- Congenital abnormalities
- Personal injury
- Disfiguring disease
Examples:
- Not allowed: elective cosmetic surgery, teeth whitening
- Allowed: reconstruction after mastectomy, scar revision after accident
OTC & Prescription Drug Rules
Current law (CARES Act, permanent):
- Over-the-Counter (OTC) drugs and medicines are eligible without a prescription.
- Menstrual care products are eligible.
- Insulin is eligible whether or not prescribed.
Premiums
Insurance premiums can qualify as a §213(d) medical expense, but whether they can be reimbursed or paid depends entirely on the account type. Some arrangements allow premium reimbursement, while others prohibit it even though the premium itself fits the 213(d) definition.
Premiums that count as 213(d):
- Medical, dental, and vision insurance
- COBRA continuation coverage
- Medicare Parts A, B, D, Medicare Advantage, and certain Medicare supplement policies
- Eligible long-term care (LTC) insurance premiums
- Note: LTC premiums are subject to IRS age-based caps under §213(d).
Premiums that do not count as 213(d):
- Life insurance
- Disability insurance
- Standalone indemnity or income replacement plans (Aflac-type cash benefits)
- Policies that primarily pay for lost wages rather than medical care
Important Account-Specific Rules Regarding Premiums
Even when premiums qualify under §213(d), reimbursement is not universally allowed:
Health Savings Accounts – HSAs
HSAs generally cannot be used for health insurance premiums, except for:
- COBRA premiums
- Medicare premiums (Parts A, B, D, MA) once HSA eligibility ends
- LTC premiums (within IRS limits)
- Unemployment-based health coverage
HSAs cannot reimburse individual market premiums outside these exceptions.
Health Reimbursement Arrangements – HRAs
HRA premium reimbursement depends on the HRA design:
- Retiree HRAs frequently cover premiums.
- LTC premiums may be reimbursed if the HRA design allows.
Individual Coverage HRAs – ICHRAs
ICHRA is the explicit mechanism that can reimburse:
- Individual market premiums
- Medicare premiums
- Other 213(d) expenses if the employer chooses to include them
ICHRA and QSEHRA are the only arrangements that permit tax-free reimbursement of individual health insurance premiums.
Flexible Spending Accounts – FSAs
Health FSAs cannot reimburse premiums at all — even if they qualify as 213(d) expenses.
Items Requiring Substantiation
Some items require proof of medical necessity or a doctor’s prescription:
- Nutritional supplements
- Massage therapy
- Chiropractic equipment
- Air purifiers
- Special foods
These must be primarily for medical care, not general wellness.
Transportation & Lodging
Eligible if primarily for and essential to medical care:
- Mileage to medical appointments (IRS standard medical rate)
- Parking, tolls
- Public transportation
- Lodging up to $50 per person per night when away from home for medical care
Meals are not eligible.
Expenses for Dependents
Eligible for:
- The participant
- The participant’s spouse
- Tax participant’s tax dependents (as defined under §152)
Timing Rules
An expense is eligible only if:
- It is incurred (not paid) during the period coverage is active
- It is medically necessary at the time it occurred
- Proper substantiation is provided (for HRA, FSA, ICHRA)
HSAs follow timing-of-disbursement rules, not substantiation rules.
Common Examples of 213(d) Eligible Expenses
- Office visits, specialist visits
- Urgent care, ER
- Lab tests, X-rays, CT scans, MRIs
- Prescription medications
- Insulin
- Hospital services
- Therapy, counseling, psychiatry
- Chiropractic care
- Dental procedures (non-cosmetic)
- Orthodontics (when medically necessary)
- Vision exams, glasses, contacts – including sunglasses
- Fertility treatments
- Durable medical equipment
- Smoking cessation programs
- Weight-loss programs prescribed for a diagnosed condition
Common Non-Eligible Expenses
- Cosmetic surgery/elective aesthetics
- General vitamins and supplements
- Gym memberships (unless prescribed for a medical condition)
- Non-prescription cosmetic items
- Hair transplants
- Over-the-counter toothpaste, soap, lotion (unless specifically medical)
- Medicinal marijuana