HSA/FSA
What Is A Letter Of Medical Necessity?
A Letter of Medical Necessity (LOMN) is a doctor's note allowing HSA/FSA spending on medically necessary items not IRS-approved. Flex simplifies the process for consumers by partnering with merchants, streamlining checkout, and eliminating reimbursements.
October 30, 2023
Sam O'Keefe
Co-founder & CEO of Flex
Overview
Overview
Overview
The IRS developed and oversees the guidelines for what is eligible for HSA or FSA spending but their expertise only extends so far.
While it’s straightforward enough for them to provide guidance at a population level on how things like prescription glasses, OTC pain and cold meds, and bandages are used for medical purposes, it’s harder for them to determine if an individual consumer should be eligible to spend money on things like a fitness program, specialty footwear, or an at home test kit for various biomarkers.
Instead, the IRS allows for individual doctors to make determinations on behalf of patients, to qualify certain purchases for HSA or FSA spending. Enter the Letter of Medical Necessity.
A Letter of Medical Necessity, or LOMN, is a doctor’s note that deems a product or service medically necessary for a patient. LOMNs are a little known tool that consumers can use to purchase health related items, not already approved by the IRS, with their HSA or FSA.
The LOMN, written by a licensed healthcare provider, will outline why a specific purchase is medically necessary for an individual.
What Does a Letter of Medical Necessity (LOMN) Include?
Here’s the rundown of what will be included in the letter.
Basic Patient Information
Provider Details
Condition Details - What condition or issue you’re managing, mitigating, or treating with the purchase.
Recommended Treatment - What product or service the consumer is looking to purchase.
Purchase Rationale - Why the individual needs the product or service. This may include details on the product or service, demonstrated effectiveness, and alternatives that have been explored.
Provider Signature
When Should You Get a Letter of Medical Necessity(LOMN)?
The short answer is, ahead of an HSA or FSA purchase that may not be eligible. Now, that might be a little hard to determine but a good general rule is that if the product or service isn’t provided at a medical institution or sold at a pharmacy, you may need a LOMN.
This is especially true if the product or service could also be used for general wellness purposes (aka it isn’t specifically a medical item). Examples of that might be a weight loss program or most types of OTC supplements.
How Do You Get a Letter of Medical Necessity, Today?
If a consumer wants to get a Letter of Medical Necessity today, they need to schedule time with their provider to discuss the issue ahead of their purchase. This has been made a bit easier in recent years due to telemedicine and virtual visits but often consumers are left waiting for several weeks for an appointment. More often than not, consumers will just pay out of pocket instead of waiting until they can see their provider.
In the rare cases, consumers do have the appointment and leave with a Letter in hand, that’s only step one. From there, they need to purchase the product or service with their regular credit or debit card, and then submit both an itemized receipt and the Letter of Medical Necessity to their HSA or FSA provider to substantiate the purchase. Then they hope and wait for reimbursement.
It’s not surprising that few consumers choose to take advantage of this process!
How Do You Get a Letter of Medical Necessity, with Flex?
Flex partners with merchants to make the whole process super simple for the consumer.
When a consumer goes to checkout at a merchant who has partnered with Flex, that doctor’s appointment takes place in the checkout flow. The consumer fills out a short eligibility form, sharing relevant information with Flex’s medical team. For consumers who qualify, Flex sends the Letter of Medical Necessity to the consumer via email.
Then, the consumer enters their HSA or FSA card details and completes the purchase. Say goodbye to reimbursements!
Consumers should keep the Letter for their records, along with the receipt from the purchase, in the event the IRS audits spending from their HSA or FSA account. That’s it!
One small step for your HSA, one giant leap for your healthcare.
The IRS developed and oversees the guidelines for what is eligible for HSA or FSA spending but their expertise only extends so far.
While it’s straightforward enough for them to provide guidance at a population level on how things like prescription glasses, OTC pain and cold meds, and bandages are used for medical purposes, it’s harder for them to determine if an individual consumer should be eligible to spend money on things like a fitness program, specialty footwear, or an at home test kit for various biomarkers.
Instead, the IRS allows for individual doctors to make determinations on behalf of patients, to qualify certain purchases for HSA or FSA spending. Enter the Letter of Medical Necessity.
A Letter of Medical Necessity, or LOMN, is a doctor’s note that deems a product or service medically necessary for a patient. LOMNs are a little known tool that consumers can use to purchase health related items, not already approved by the IRS, with their HSA or FSA.
The LOMN, written by a licensed healthcare provider, will outline why a specific purchase is medically necessary for an individual.
What Does a Letter of Medical Necessity (LOMN) Include?
Here’s the rundown of what will be included in the letter.
Basic Patient Information
Provider Details
Condition Details - What condition or issue you’re managing, mitigating, or treating with the purchase.
Recommended Treatment - What product or service the consumer is looking to purchase.
Purchase Rationale - Why the individual needs the product or service. This may include details on the product or service, demonstrated effectiveness, and alternatives that have been explored.
Provider Signature
When Should You Get a Letter of Medical Necessity(LOMN)?
The short answer is, ahead of an HSA or FSA purchase that may not be eligible. Now, that might be a little hard to determine but a good general rule is that if the product or service isn’t provided at a medical institution or sold at a pharmacy, you may need a LOMN.
This is especially true if the product or service could also be used for general wellness purposes (aka it isn’t specifically a medical item). Examples of that might be a weight loss program or most types of OTC supplements.
How Do You Get a Letter of Medical Necessity, Today?
If a consumer wants to get a Letter of Medical Necessity today, they need to schedule time with their provider to discuss the issue ahead of their purchase. This has been made a bit easier in recent years due to telemedicine and virtual visits but often consumers are left waiting for several weeks for an appointment. More often than not, consumers will just pay out of pocket instead of waiting until they can see their provider.
In the rare cases, consumers do have the appointment and leave with a Letter in hand, that’s only step one. From there, they need to purchase the product or service with their regular credit or debit card, and then submit both an itemized receipt and the Letter of Medical Necessity to their HSA or FSA provider to substantiate the purchase. Then they hope and wait for reimbursement.
It’s not surprising that few consumers choose to take advantage of this process!
How Do You Get a Letter of Medical Necessity, with Flex?
Flex partners with merchants to make the whole process super simple for the consumer.
When a consumer goes to checkout at a merchant who has partnered with Flex, that doctor’s appointment takes place in the checkout flow. The consumer fills out a short eligibility form, sharing relevant information with Flex’s medical team. For consumers who qualify, Flex sends the Letter of Medical Necessity to the consumer via email.
Then, the consumer enters their HSA or FSA card details and completes the purchase. Say goodbye to reimbursements!
Consumers should keep the Letter for their records, along with the receipt from the purchase, in the event the IRS audits spending from their HSA or FSA account. That’s it!
One small step for your HSA, one giant leap for your healthcare.
Flex is a modern marketplace for consumers to discover and purchase HSA/FSA eligible products. From fitness and nutrition, to sleep and mental health, Flex takes a holistic view of healthcare and enables consumers to use their pre-tax money to do the same.