A Participant submits a formal appeal to her plan and writes: “My tax consultant says that under Publication 502 you have to reimburse my prescriptions because they are eligible medical expenses.” Another writes: “The IRS says it’s ok to pay orthodontia in one lump sum payment and you people are making me jump through hoops and submit monthly. I want my money now.” How should an employer respond when its plan restricts what the IRS would otherwise permit?

Benefits Alert 2011-01

The Internal Revenue Service has concluded that breast pumps and supplies that assist lactation are medical care under § 213(d) of the Internal Revenue Code because, like obstetric care, they are for the purpose of affecting a structure or function of the body of the lactating woman.

Therefore, amounts reimbursed for these expenses qualify as eligible medical expenses under Health FSAs, Archer medical savings accounts, health reimbursement arrangements (HRAs), or health savings accounts (HSAs).