Baby formula is typically not eligible for reimbursement with a Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA).
In certain medical circumstances, the difference in cost of a specialized formula required for treatment of a diagnosed condition may be reimbursable with a Letter of Medical Necessity (LMN). Baby formula is not eligible under a limited-purpose FSA (LPFSA) or dependent care FSA (DCFSA).
Why Is Baby Formula Not FSA/HSA Eligible?
The IRS generally classifies baby formula as food that meets normal nutritional requirements, which places it outside the scope of reimbursable medical expenses. According to IRS Rev. Rul. 55-261 and IRS Publication 502, baby formula may only be considered a medical expense if:
It is prescribed by a physician for alleviation of a specific illness,
It is in addition to the child’s normal diet, and
It is not part of the normal nutritional needs of the patient.
Commercial baby formula is designed to replicate breast milk and is regulated by the FDA to contain 29 essential ingredients. Common types include:
Cow’s milk-based formula – the most widely used, though some infants may be allergic.
Soy-based formula – often chosen to avoid animal products.
Protein hydrolyzed formula – partially or extensively broken down proteins, sometimes hypoallergenic.
What’s Not Covered?
Standard formula purchased for general feeding
Formula used for convenience or personal preference
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Any formula without medical documentation
Specifically Not Covered
The full cost of regular baby formula is not eligible. Only the cost difference for a prescribed specialized formula to treat a medical condition may be considered.
LMN and Exceptions
An LMN is typically required when:
A baby has severe food allergies
A baby is diagnosed with gastrointestinal disorders
A physician prescribes a hypoallergenic or metabolic formula
How to Buy Baby Formula with Your FSA or HSA
Schedule an appointment with your child’s pediatrician or specialist.
Ask your doctor to complete a Letter of Medical Necessity (LMN) detailing the diagnosis and required formula.
Submit the LMN to your FSA/HSA administrator for review and approval.
Once approved, purchase the prescribed formula using your FSA/HSA card or pay out of pocket and file for reimbursement.
Keep copies of the LMN, receipts, and administrator approval for your records.
