Medical alert devices may be eligible for FSA or HSA reimbursement if they are considered medically necessary and meet IRS guidelines. Learn more.
FSA HSA Eligibility for Medical Alert Devices for Seniors: Explained
Medical alert devices for seniors play a crucial role in ensuring the safety and well-being of seniors. These devices provide elders with immediate assistance in case of emergencies. However, the cost of these devices can be a concern for many individuals and their families.
Fortunately, Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) offer a way to offset these expenses. In this case, tax-advantaged accounts also aid in making medical alert systems more affordable. The eligibility, however, depends on several factors, such as medical necessity, IRS guidelines, and proper documentation.
This guide explains whether medical alert devices for seniors qualify for FSA or HSA reimbursement.
Importance of Knowing About FSA And HSA Accounts
Before delving into the criteria for qualifying medical alert for seniors, you must first take into account the workings and advantages of the FSA and HSA account systems.
Flexible Spending Account (FSA)
Related to health spending sponsored by employers, these accounts allow reductions in taxes. They let employees withdraw money from their paychecks before they are taxed, allowing them to pay for medical expenses. The outstanding features of an FSA include:
- Involuntary contributions are considered tax-deductible making the income taxable to an extent
- The money can be utilized for paying the eligible medical expenses during mid-year
For some employers, it is possible to carry forward unused funds, but typically not more than 5% of the total could be rolled over to the next year.
Health Savings Account (HSA)
HSAs are tax-advantaged investment accounts for people who have high-deductible health plans (HDHPs). It is more flexible than an FSA:
- There is no expiration, and funds roll over year after year
- Contributions made are tax-deductible
- Earnings accrue tax-free, and tax-free withdrawals for qualified medical expenses can also be made
HSAs can be a long-term investment, even into retirement years, as they can help declare savings for medicals.
Does Medicare Cover Medical Alert Systems?
Medicare generally does not cover medical alert devices for seniors, as they are considered non-medical expenses. However, some Medicare Advantage (Part C) plans may offer coverage for these devices as an additional benefit.
Seniors can check with their plan provider to see if their policy includes medical alert system coverage. Additionally, Medicaid or long-term care insurance may help cover costs in certain states or under specific programs.
When Are Medical Alert Devices Reimbursable?
Medical alert devices may be covered by an FSA HSA coverage plan if:
Having a Doctor’s Prescription
Health insurance will likely reimburse a medical alert device’s related costs if deemed necessary for a chronic condition. Chronic conditions such as severe mobility dysfunctions coupled with old age can result in dire medical situations without immediate assistance.
Emergency Fall Detection Systems Integrated with IoT
Regular fall detection devices and probes are most likely to be accepted as a medical necessity. They reduce unattended falls and the complications that could follow. Those who are suffering from Osteoporosis or Parkinsons’ Syndrome stand a fairer chance when it comes to acquiring these health benefits.
Detailing Medical Alert Device Monitoring Features
Advanced medical alert devices for seniors may feature a heart rate monitor, blood pressure level checker, glucose monitor, and medication reminder.
If the offered features help manage an existing medical condition, the device may qualify for reimbursement under FSA/HSA components.
When Are Devices Not FSA or HSA Eligible?
Not all medical alert systems are FSA or HSA reimbursable. The IRS may disqualify devices under the following circumstances:
General Convenience Devices
The FSA eligible devices may be ineligible if a medical alert device is acquired to monitor safety rather than medical needs.
Subscription and Monitoring Fees
While the device itself may be covered, charges incurred monthly for monitoring the emergency response services device may not be reimbursed.
No Medical Condition or Doctor’s Prescription
The device may be considered non-useful without a prescription by an authorized medical practitioner, and thus the IRS will not allow tax relief.
What to Do To Ensure Claims Have Been Approved by the HSA?
If you think your FSA or HSA card should be used in acquiring a medical alert system, be sure to follow these processes for FSA and HSA card approval:
How to Procure a Letter Of Medical Necessity
A Letter of Medical Necessity, or LMN, from a physician increases the chances of reimbursement. The letter should include the following:
- Describe the health complication that makes the use of a medical alert device necessary
- Explain the risks to health that the device will prevent or help manage
- Add a statement confirming the device is required for medical purposes
Purchase the Device from a Retailer
Many medical supplies are FSA and HSA-approved by several online and retail stores. Verify FSA Store and HSA Store, which have an entire list of items already approved. Some vendors explicitly state whether a device qualifies for reimbursement.
FSA or HSA Debit Card
Many FSA and HSA plans supply payment cards, which means the funds can be used directly for payments at the point of sale. You can save yourself from hassle later on by using the option that provides cards with your account.
Claim a Reimbursement
You can submit a reimbursement claim to FSA or HSA with supporting documents when less readily accessible devices are purchased. Those documents are mentioned here:
- A receipt showing the device’s purchase
- A Letter of Medical Necessity (LMN) (if required)
- Other documents needed by the FSA or HSA manager
Benefits of Using FSA or HSA for Medical Alert Devices
For medical alert systems, the value of adopting these devices is well-known for the elderly. They can access help swiftly in case there’s a medical emergency. The problem lies in buying and maintaining these systems as they can be expensive.
The good news, however, is that Flexible Spending Accounts (FSAs) and Health Saving Accounts (HSAs) can come to the rescue. Here’s how these accounts can be helpful for medical alert systems:
Tax Savings
Savings on tax is one of the straightforward advantages an account offers. Tax savings are one of the perks of opening an HSA or FSA, especially about the purchase of medical alert devices. It alleviates the financial strain.
How it works:
- Contributions made to an FSA or HSA are exempt from federal income tax, social security tax, and Medicare tax
- While making eligibility combinations with the account, the user is free to pay medical expenses that are qualified at zero tax slab
- If you are inflating more than your account value limit, you can claim savings of about twenty to thirty percent on medical expenses depending on your tax caliber.
Consider the Following:
If you happen to fall under the 24% tax bracket, spending $300 on a medical alert device will cost you $228 after you apply a $72 tax deduction using your HSA or FSA account.
Example: Seniors who earn a small pension may have difficulties affording an $800 medical alert device. However, the funds withdrawn from the HSA account tend to accumulate over time. Moreover, these allow them to make this purchase without abstracting from their immediate budget.
Reduces Financial Burden
Managing numerous medical expenses while being a senior on a fixed income is never easy, especially when looking to buy a medical alert device. Increasing the budget simply isn’t an option, but HSAs and FSAs give patients the medical alert device without putting too much strain on their monthly budget.
Why is it Helpful
The funds that go into these accounts are set aside throughout the year, meaning the money is always there when needed. Without having to dip into credit or post-tax income, seniors or caregivers can purchase the Medical alert systems they need.
In addition to this, the funds in HSAs roll over from year to year, allowing seniors and anyone else to plan for their medical alert device and any other future health spending needs. People can access the medical support that they need without worrying about finances by using their savings before taxes.
Funds Rollover (HSA) – Medical Expense Provisions
Significantly, most HSAs have a feature that allows unused funds to roll over for indefinite periods. Compared to FSAs that require a spend it or lose it culture within a given time frame, HSAs work best as long as there are savings within the account as it grows tax-free.
How this assists with medical alert devices:
- Users can fund an HSA for many years and only use it when they need to purchase a medical alert unit.
- This feature makes HSAs exceptional for advanced retirement health spending strategies.
Seniors wishing to delay the purchase of a medical alert device can save HSA funds and buy it when their condition necessitates it.
Making Payments More Convenient
When using an FSA or HSA to obtain a medical alert device, payment can be made quickly and at any time. Using an FSA or HSA debit account allows for direct purchasing without the hassle of reimbursement waiting periods. If this option isn’t available, individuals can pay out of their pocket and request reimbursement later.
In particular, HSAs allow for expenses to be reimbursed at any time as long as the expense was qualified and accepted as a medical expense. This flexibility guarantees the availability of a medical alert device for senior citizens and caregivers, who no longer have to worry about financial restrictions.
Wrap Up
For older people who still want to remain independent, medical alert devices for seniors are essential for their safety in the event of an emergency. Fortunately, some of these devices can be claimed for reimbursement through Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs).
Seniors and their caregivers should follow the strategies related to understanding eligibility criteria and acquiring a Letter of Medical Necessity. As for those budgeting for their healthcare expenses, an HSA is particularly useful for those advanced medical alert system needs because of its rollover feature.
Maximize Your FSA & HSA Benefits for a Medical Alert Device with MedAlert Care
Maximize your FSA and HSA benefits when purchasing a medical alert device from MedAlertCare.com. Our reliable medical alert systems help seniors stay safe and independent, providing 24/7 emergency assistance. Check if your device qualifies for FSA or HSA reimbursement and make your investment more affordable. Thus ensuring peace of mind for you and your loved ones.
FAQ's
Yes, HSA may cover a medical alert device if it is considered medically necessary and used for diagnosing, preventing, or treating a health condition.
Some medical devices, including certain medical alert systems, are FSA-eligible if they meet IRS guidelines for medical necessity.
You may need a Letter of Medical Necessity (LMN) from a doctor and a receipt of purchase. Moreover, any required documents are specified by your FSA or HSA provider.
