VitaFlex Employee Guide: Medical Expense Provisions
How Does The Plan Work?
The Plan allows you to use pre-tax dollars to pay for eligible medical expenses that are not fully
covered or not covered at all under your group health insurance plan. Only certain expenses will
qualify to be reimbursed under this Plan. The Internal Revenue Service provides guidelines on which
expenses are eligible to be reimbursed in Section 213 of the IRS Code and the accompanying
regulations. Normally, only those IRS-approved health care expenses that exceed 7.5% of your
adjusted gross income qualify as a deduction on your itemized personal income tax return. With the
VitaFlex Reimbursement Plan, you can realize tax savings immediately on all eligible medical
expenses. Since you contribute to the account on a pre-tax basis, you save the taxes that you would
otherwise have to pay.
Which Medical Expenses Are Eligible?
Only medical, dental, or vision expenses not reimbursed by an insurance plan or any other source are
eligible for reimbursement under the plan. To be considered eligible, the service or product must be
used for medical reasons only. For example, physical therapy for general well being or cosmetic
services would not be considered eligible. Non-prescription drugs that are available “Over-the-
Counter (OTC)” can be eligible, but only when they are used to treat an illness or injury and when
purchased in reasonable quantities.
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Page 7 of this Employee Guide includes a partial listing of health care expenses that are generally
eligible for reimbursement from a Medical Reimbursement Account. Generally, the direct guidance
from the IRS on eligible expenses under an FSA plan is limited. Consequently, VitaFlex has
developed detailed policies on the eligibility of expenses. The VitaFlex policies and procedures
directly apply all available guidance from the IRS. IRS Publication 502, “Medical and Dental
Expenses” outlines eligible medical expenses for personal tax deductions purposes. You may order a
current copy of IRS Publication 502 for your reference by calling the IRS at 800-829-3676 or by
visiting www.irs.gov. However, please note there are certain items that may be eligible for personal
tax deduction and thus listed in Publication 502 that are NOT eligible expenses under the VitaFlex
Plan.
In addition, please note that Section 125 and Publication 502 have different rules on when an
expense must be incurred. To “incur” a health care expense, as defined by Section 125, means the
date when the participant is provided with the care that gives rise to the health expense, not when the
participant is formally billed or charged or actually pays for the care. To “incur” a prescription means
the date the pharmacy actually fills the prescription, not the date it is called in, dropped off, or picked
up.
Which Medical Expenses Are Not Eligible?
The IRS has provided specific guidelines for expenses that may not be reimbursed on a pre-tax basis.
Certain health care expenses are not considered to be qualified and thus are not eligible for
reimbursement, even if they are prescribed by a physician. Health care related expenses are not
eligible if they are not directly for medical purposes or not deemed medically necessary. In general,
expenses must not be for cosmetic purposes. Non-prescription drugs and medicines available overthe-
counter must be used to treat a medical condition and not used simply for general health.
Therefore, vitamins, dietary supplements, cosmetic drugs, and personal toiletries are not eligible.
Page 7 includes a partial listing of medical expenses not eligible for reimbursement.
Common Eligible Medical Expenses
Following is a list of common eligible medical expenses. This list is not exhaustive, but provides an
overview of the type of expenses that may be eligible under the VitaFlex Plan.
Medical Services
Ambulance Expenses
Birth Control Pills
Christian Science Fees
Coinsurance
Copayments
Hospital Expenses
Immunizations and Vaccinations
Laboratory/X-ray Fees
Physician Fees
Rx Drug Copayments
Routine Physical Exams
Sterilization Expenses
Surgical Expenses
UCR Excess Charges
Other Services
Childbirth Classes
Fertility Treatments
Sales Tax on Medical Items
Dental Services
Dental Care
Dentures
Orthodontia (only treatment incurred during Plan Year)
Dental Exams
Occlusal Guards
Implants
Vision Services
Corrective Contact Lenses
Eye Exams
Eyeglasses
Laser Eye Surgery
Prescription Sunglasses
Durable Medical Equipment
Blood Pressure Monitoring Device
Crutches
Hearing Aids
Oxygen
Wheelchair
Therapy*
Acupuncture
Chiropractic Care
Counseling Services
Drug/Alcoholism Treatment
Massage Therapy
Physical Therapy
Psychiatry
Psychologist Fees
Speech Therapy
Over-the-Counter Items
Allergy Medication
Antacids
Bandage Materials
Canker & Cold Sore Relief
Contact Lens Solution
Contraceptive Devices
Pain Relievers
Scar and Wound Ointment
Smoking Cessation Products
* These expenses require confirmation of medical diagnosis and a statement of the medical necessity
of the specific treatment.
Common Ineligible Medical Expenses
Following is a partial list of common medical expenses that are not eligible for reimbursement. This
list is not exhaustive, but provides an overview of the type of expenses that are not eligible under the
VitaFlex Plan.
Over-the-Counter Items
Anti-Aging Products
Beauty Products
Bottled Water
Cosmetics
Dental Floss
Diapers
Food & Herbal Supplements
Sexual Encounters
Toiletries
Toothpaste or Toothbrush
Vitamins
Any OTC Products used for general health or well-being
Any OTC Products Purchased in stockpile quantities
Personal Care/Well Being
Counseling for Relationship or Personal Growth
Custodial Care
Domestic Help Expenses
Food Expenses (even if part of a weight loss program)
Funeral or Burial Expenses
Health Club Membership/Dues
Nursing Care for home care of healthy newborn
Physical Therapy without medical
Psychotherapy for Relationship or Personal Growth
Social Activities or Programs
Stress Management Classes/Therapy
Dental Services
Cosmetic Dentistry
Orthodontia (any treatment incurred outside the Plan Year)
Other Services
Health Insurance Premiums
Home or Automobile Insurance
Long Term Care Expenses
Long Term Care Premiums
Marijuana or Other Illegal Substances
Maternity Clothes
Parking Fees
Transportation Expenses
Weight Loss Programs
Questions about Eligible Expenses
There are many expenses that may not be listed on either the eligible list or the not eligible list. If you
have questions about whether an expense is eligible, please seek clarification prior to making an
election to participate. If you plan on having an expense reimbursed and you later find out that it is
not eligible, you may not change your election. The best resource for claim eligibility is the searchable
database on the VitaFlex website at www.vitaflex.net. For additional information regarding eligibility of
certain expenses call Vita at 650-966-1492 or at 800-424-3052.
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