In Announcement 2011-14, the Internal Revenue Service reversed its position with respect to whether the cost of breast pumps and supplies that assist with lactation may be reimbursed from a flexible spending account. In Information Letter 2010-0173, the IRS had held that the costs associated with breast pumps and supplies did not qualify as medical expenses under section 213(d) of the Internal Revenue Code and were therefore not eligible for reimbursement from a flexible spending account. The IRS explained that medical care expenses are limited to expenses relating to the diagnosis, cure, mitigation, or treatment of a disease. Medical care expenses do not include expenses relating to goods or services obtained for general health.
In reversing its position, the IRS reasoned that, similar to obstetric care, breast pumps and related supplies are for the purpose of "affecting a structure or function of the body of a lactating woman." Consequently, these costs are medical expenses that are deductible medical expenses and can be reimbursed from flexible spending arrangements, Archer medical savings accounts, health reimbursement arrangements, or health savings accounts.
Comment: Employers should review and update, if applicable, participant communication related to qualified medical care expenses to make sure the information accurately reflects the ability to seek reimbursement for lactation related expenses.