Select, curate, and manage the list of eligible expenses for each benefit type for each of your organizations.
How to add eligible expenses to a benefit template
Partner Administrator Feature
This feature is only available for partner administrators. It is not available for organization administrators.
Choose the Benefit Builder tab.
Select Edit Program on the benefit template you wish to edit.
Navigate to the Eligible Expenses section.
Open the collapsed section.
Choose Select Expenses.
Select eligible expenses from the options presented.
Select Add Expenses.
Select Save Changes.
Select Yes, Update All Benefits.
Select Yes, Update All Benefits again.
Using the expense category feature
Each eligible expense category is broken into large buckets. You can select Expand All to show every available eligible expense, or you can use the search function to find specific expenses. You can select Collapse All to go back to the default state.
You can select all available expenses in a category by selecting the box, or you can select individual expenses by expanding each category.
Note:
When using the search function, be sure to type in the expense you’re looking for exactly. Additionally, searching only applies to expenses; categories and groups won’t be searched.
When you’ve selected expenses, the expense group name becomes bold at the top level so that you know expenses have been selected in that category. The group name becomes bold if any expense within the group is selected, and the category name shows the number of selected expenses within it.
Removing selected expenses
You can remove all selected expenses by choosing Clear Selected. You’ll be prompted to confirm that you’d like to remove the expense. Select Clear Selected when prompted.
How eligible expenses relate to card spending
Eligible expenses define what benefit plans cover. These are the rules administrators use when reviewing and approving claims. Card spending controls (Merchant Categories) attempt to prevent ineligible purchases by restricting where cards can be used. However, card transactions may still go through for ineligible expenses. You can think of it this way:
Eligible Expenses = The official rules (what will be approved).
Card Controls = Card guardrails to help prevent mistakes (not always perfect).
To set up card spending restrictions, read Control card spend with Merchant Categories.
How eligible expense updates are made visible
After you save changes to eligible expenses in the Benefit Builder, the updates are visible to all applicable organization admins in Health Wallet Manager and to members in Health Wallet.
Understanding eligible expenses
Internal Revenue Code Section 213(d) is the federal law that defines "medical care" for tax purposes. This definition assists in determining what expenses may be eligible for tax-advantaged accounts like health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs).
What IRC 213(d) defines
The statute defines medical care as amounts paid for:
The diagnosis, cure, mitigation, treatment, or prevention of disease
Treatments affecting any structure or function of the body
Transportation is primarily for and essential to medical care
Qualified long-term care services
Insurance covering medical care
For an expense to be eligible under IRC 213(d), it must be primarily for medical care. This means:
Eligible: An expense that treats, diagnoses, or prevents a specific medical condition
Not eligible: An expense that is merely beneficial to general health
For instance, prescription eyeglasses would be eligible because they correct vision impairment, but non-prescription sunglasses wouldn’t be, as they only offer general eye protection.
Additional information regarding qualified long-term care services
Qualified long-term care expenses cannot be reimbursed under a health FSA on a tax-free basis, even though such expenses are deductible under Code §213(d).
Prop. Treas. Reg. §1.125-5(k)(4): "Also, a health FSA is not permitted to reimburse expenses for long-term care insurance premiums or for long-term care services for the employee or employee's spouse or dependent"
HRAs are prohibited from reimbursing long-term care services under Code §106(c). HSAs can be used for long-term care services.
Additional information regarding insurance covering medical care
Health FSAs may not reimburse health insurance premiums (Prop. Treas. Reg. §1.125-5(k)(4)) HSAs are limited to insurance premiums that may be paid.
From Publication 969: Insurance premiums. You can’t treat insurance premiums as qualified medical expenses unless the premiums are for any of the following:
Long-term care insurance.
Health care continuation coverage (such as coverage under COBRA).
Health care coverage while receiving unemployment compensation under federal or state law.
Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).
The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually.
Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. For item (4), if you, the account beneficiary, aren’t 65 or older,
Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) aren’t generally qualified medical expenses
** This communication and all information herein are for educational purposes only. Tenant/Partner is fully responsible for determining whether an expense qualifies as an “eligible expense” as defined by, and in accordance with, IRC 213(d). First Dollar neither advises nor guarantees that a certain expense qualifies as an “eligible” expense under IRC 213(d) [and disclaims all liability]. First Dollar does not offer or provide tax or legal advice.**