Flexible Spending Account (FSA) For Your Service Dog

How Does FSA Reimbursement Work?

A Flexible Spending Account (FSA) is a useful way for people to save for medical costs.  All money that is put into an FSA is pre-tax money and can be used to pay for a visit to the dentist, a therapist, or other kind of healthcare costs. But would using an FSA for a service dog fit the bill?

In this article, we explore the possibility of FSA service dog use, including examples of medical necessities, reimbursement, and other frequently asked questions. 

When It's Okay to Use FSA Funds for a Service Animal

An FSA (Flexible Spending Account) is often used to manage out-of-pocket healthcare expenses, and it can be used for a variety of medical-related expenses that are considered qualified by the IRS. When it comes to service dogs, expenses related to their purchase, training, and care can qualify as medical expenses if the service dog is recommended by a licensed healthcare professional. Specifically, if the service dog is trained to assist with a physical or mental disability, or to perform tasks for the benefit of an individual with a disability (as defined by the Americans with Disabilities Act), the costs associated with the service dog may be considered eligible. This includes the cost of purchasing the dog, training fees, and upkeep costs such as food, grooming, and veterinary care. However, it's crucial to keep detailed records and receipts and consult with a tax professional or the FSA administrator to ensure that the expenses are indeed qualified, as rules can be intricate and subject to change.

You Can Only Use Your FSA for a Medical Necessity

Even the IRS, which sets out what can and can’t be classified as a reimbursable medical expense, does not specify if using an FSA account to pay for a service animal is allowable. But if you can demonstrate that your service dog is a medical necessity, you might be able to use your FSA to afford related costs. Ultimately, its vital that you keep as much documentation as possible that can be provided as evidence that a service dog is a medical necessity. This may include medical records, recommendation letters from a healthcare professional, and proof of what your service dog-related expenses are.

Examples of Medical Necessities

Some examples of medical necessities where you can use your FSA include:

• Physical medical condition: Physical medical conditions that limit mobility often require the use of a trained service dog. Trained service dogs can assist with everyday tasks, including opening doors and picking up items for their owner.
• Psychiatric medical conditions: Psychiatric medical conditions, such as Post Traumatic Stress Disorder (PTSD), anxiety, and depression often necessitate an individual having a trained service dog to help cope with everyday situations and pressures.
  

Using an FSA Reimbursement for Service Animals

To utilize an FSA for service dog expenses, you'd typically start by ensuring your FSA plan covers these specific costs, as plan specifics can vary. After confirming eligibility, you'd contribute pre-tax dollars to your FSA, then seek reimbursement for qualified service dog expenses by submitting a claim through your FSA administrator, often with a receipt or invoice as proof of payment.

How to Submit a Claim

To pay for your service dog expenses using your FSA, you should begin by submitting a claim to your FSA administrator. Your administrator will require documents with your submission to support your claim. These documents may include:

• Prescription or Letter of Medical Necessity: A letter or prescription from a licensed medical health professional that clearly states your need for a service dog to help you with your medical condition or disability. 
• Paperwork: The cost of training, veterinarian bills, service dog supplies, and all types of paperwork that your FSA administrator may require. It’s important to keep accurate records and paperwork for all of your service dog expenses.
• Certification of Training Program: If your service dog attended a training program with a recognized service dog training organization, then paperwork attesting to the dog’s successful completion of the training program should be obtained.

How Much Does a Service Dog Cost?

The cost of a service dog can vary. Things to consider include the cost of the dog, the cost of training, the certification from a recognized training program, and equipment and supplies. An estimate of $15,000-$30,000 would be considered reasonable for a fully-trained service dog.

Other Ways to Pay for a Service Dog

Although you can use your FSA to pay for your service dog, a few other options are available. These include:  

• Financial Assistance Programs: Some organizations provide financial assistance or fully trained service dogs at subsidized costs.
• Grants and Scholarships: Grants or scholarships are often available through various organizations aimed at helping people to pay for service dogs.
• Community Fundraising: You can consider GoFundMe pages or ask family, friends, neighbors, or relatives to help you raise funds for the cost of a service dog.

Using an FSA for Emotional Support Animals

These FSAs are drawn from pre-tax dollars. However, while FSAs are designed to cover medical needs, there are gray areas. ESAs might not sufficiently qualify as having a medical need. The key is to have a clear medical necessity with documents or letters from a doctor.

Go Deeper

Flexible Spending Account (FSA) Reimbursement For Your ESA or PSD

You can utilize a Flexible Spending Account (FSA) reimbursement for an emotional support animal under specific criteria. If you possess an ESA letter stating that your emotional support animal is a health requirement, you will find it easier to use your FSA account for ESA-related costs.

Frequently Asked Questions about Flexible Spending Accounts

Does FSA cover pet care?

No, the IRS won’t reimburse the normal costs of raising your pet, but if your pet has a medical function, you might be able to use your FSA for that expense.

Will HSA cover a service dog?

HSAs have restrictions, so it’s important to keep up to date on regulations. However, if having a service dog is considered medically necessary, you should be able to use your HSA account for the eligible expenses. Always inquire with your HSA administrator.

What qualifies for FSA reimbursement?

Medical care expenses qualify for FSA reimbursement. These expenses include medical bills to alleviate a physical or mental disability or illness. Dental bills are also covered. FSA reimbursement costs can be for either you, your spouse, or your dependents.

Conclusion

Using an FSA to meet the costs related to your service dog can be an option for those with a documented medical need. The IRS sets the requirements for things that count as medical expenses, but the first step is to establish that the dog is a medical necessity through prescriptions and letters. It’s always best to work with your healthcare providers, and your FSA administrator, and act per IRS requirements to get the most out of your FSA benefit to help you afford your service dog.