Explore how we can help youWork with us
The IRS generally allows taxpayers to take a deduction for expenses they paid during the taxable year for medical care—as long as they’re “qualified medical expenses.” Alternatively, these medical expenses can typically be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA) or health reimbursement arrangement (HRA).
The IRS recently issued updated guidance to provide further clarity on which expenses qualify.
According to the FAQs, the following are generally reimbursable from an HSA, FSA, Archer MSA, or HRA:
According to the FAQs, the following are generally not reimbursable from an HSA, FSA, Archer MSA, or HRA:
Note on FSA substantiation requirements
To help avoid having an FSA reimbursement taxed as wages, expenses should be fully substantiated by an independent third party. This substantiation information should include:
You should also certify that any expense paid by the plan hasn’t been previously reimbursed by insurance or otherwise, and that you won’t seek reimbursement from any other plan covering health benefits. An explanation of benefits from an insurance company that provides your share of the cost of care (copay, coinsurance, and/or deductible) meets this need.
The following have been identified as potentially questionable practices that don’t meet the substantiation requirements.
Keep in mind, expenses paid with debit cards must also meet the same substantiation requirements. Some debit card expenses can be “auto-substantiated”. The term auto-substantiated refers to medical expenses that may be approved without additional substantiation under the proposed cafeteria plan regulations. See the IRS memo for more information on auto-substantiation.
Speak to your advisor if you have questions about qualified medical expenses. If you don’t have an advisor and are interested in learning more about Goldman Sachs Ayco Executive Financial Management? Contact us today.
Advisory services offered by The Ayco Company, L.P. d/b/a Goldman Sachs Ayco Personal Financial Management (“Ayco Personal Financial Management” or “Ayco”), a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC (“GS&Co.”) and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization. Brokerage services are offered through GS&Co. and Mercer Allied Company, L.P. (a limited purpose broker-dealer), both affiliates of Ayco and members FINRA/SIPC.
Intended Audience. This material is intended solely for clients of Ayco and/or prospective clients who would meet the eligibility requirements to be clients of Ayco. If you have any questions on whether this material is intended for you, please contact us. Ayco takes into consideration client suitability, eligibility, and sophistication when distributing marketing materials and not all marketing materials are appropriate for all Ayco clients. Distribution of this material is premised on the reasonable belief that the recipient has sufficient financial expertise and/or access to resources to independently analyze the information presented. If you do not believe you meet this criteria, please disregard and contact your corporate contact or your advisor.
Ayco provides a wide variety of financial counseling, investment advisory, investment education and other services. Ayco’s counseling services may consist of, among other things, assisting the counseled individuals in developing a comprehensive program designed to maximize the benefits of their employers’ existing compensation and fringe benefit programs, to conserve the counseled individual’s assets, to manage income long-term basis and to develop an individual retirement program and estate plan.
The Goldman Sachs Group, Inc. is engaged in businesses and has interests other than providing financial counseling services to individuals. This includes the management and sale of investment funds and other financial products that may be recommended to counseled individuals, and investment activities and business operations that may affect such funds or products. Ayco and its counselors may receive various forms of compensation, commissions, payments, rebates, and services related to sponsoring, managing, or selling investment products recommended to counseled individuals. This may incentivize Ayco and its counselors to recommend such products over others which might also be appropriate for counseled individuals.
Ayco may provide tax advice services to its clients. In addition, in its capacity as an investment advisor, Ayco may prepare reports that reflect a client’s overall investment portfolio and financial position based on information provided to Ayco by its clients, which Ayco does not certify for accuracy or completeness. Ayco does not provide attest or compilation services and does not prepare, present, audit, review or examine prospective financial information or express any opinion as to the accuracy or validity of that information. Tax advice is provided as part of Ayco’s comprehensive financial planning services, which are not related to the preparation or presentation of financial statements. Certain tax matters may require Ayco to consult with your tax counsel in formulating its tax advice. Ayco does not provide accounting advice to its clients. GS & Co. does not provide accounting or tax advice to its clients, unless explicitly agreed between the client and GS & Co. All clients should be aware that tax treatment is subject to change by law, in the future or retroactively, and clients should consult with their tax advisors regarding any potential strategy, investment or transaction.
Neither GS & Co. nor Ayco provide legal advice to their clients, and all clients should consult with their own legal advisor regarding any potential strategy, investment, financial plan, estate plan or with respect to their interest in any employee benefit or retirement plan.
This material is for informational and educational purposes only and is provided solely on the basis that it will not constitute investment or other advice or a recommendation relating to any person’s or plan’s investment or other decisions, and Ayco is not a fiduciary or advisor with respect to any person or plan by reason of providing the material or content herein including under the Employee Retirement Income Security Act of 1974, the Internal Revenue Code or Department of Labor Regulations. Unless Ayco otherwise agrees in writing to act as a fiduciary to your retirement account, you understand that: i) all investment decisions concerning your retirement accounts are made by you, without any advice or recommendations from Ayco, and ii) any target allocation shown for your retirement account represents decisions you have communicated to Ayco regarding such asset allocation, without any advice or recommendations from Ayco, after considering your financial circumstances, objectives risk tolerance and goals.
This material is intended for educational/informational purposes only. Any advice contained in this communication, including attachments and enclosures, is intended for the sole use of the addressee, and is limited to the facts and circumstances actually known to the author at the time of this writing. The website links provided are for your convenience only and are not an endorsement or recommendation by Ayco of any of these websites or the products or services offered. Ayco is not responsible for the accuracy and validity of the content of these websites. This material is intended only to facilitate your discussions with Ayco as to the opportunities available to our clients and not to be distributed to the general public.
Not a Municipal Advisor. Ayco is not acting as a municipal advisor and the opinions or views contained in this presentation are not intended to be, and do not constitute, advice, including within the meaning of Section 15B of the Securities Exchange Act of 1934
Potential Conflicts of Interest
Under certain of Ayco’s financial counseling programs, Ayco may recommend securities or investment products, including those offered by its affiliates. This could lead to conflicts of interest of which you should be aware. The Goldman Sachs Group, Inc., Ayco, and their affiliates and employees (collectively, “Goldman Sachs”) are engaged in businesses and have interests other than providing financial counseling services to individuals. This includes the management and sale of investment funds and other financial products that may be recommended to counseled individuals, and investment activities and business operations that may affect such funds or products.
Goldman Sachs, Ayco and its counselors may receive various forms of compensation, commissions, payments, rebates and services related to sponsoring, managing or selling investment products recommended to counseled individuals. This may incentivize Ayco or its affiliates and their employees to recommend such products over others which might also be appropriate for counseled individuals. Goldman Sachs’ arrangements with outside managers may differ, and currently Goldman Sachs, Ayco and its counselors receive greater compensation for accounts managed by Goldman Sachs affiliates than in connection with separate accounts managed by non-Goldman Sachs entities.
Under certain of Ayco’s financial counseling programs, Ayco may recommend securities or investment products, including those offered by its affiliates. This could lead to conflicts of interest of which you should be aware. Ayco or its affiliates may engage in insurance consulting or the insurance agency business for purposes of offering insurance contracts to counseled individuals, including variable life insurance contracts for which Ayco or its counselors may receive various forms of compensation. In addition, investment advisors of investment funds and products that may be offered to counseled individuals also may have other clients, businesses, and interests in addition to managing the assets of such product. Present and future activities of Goldman Sachs and other advisers in addition to those described in this supplement may give rise to additional conflicts of interest. More information regarding Ayco’s business practices and conflicts is set forth in Ayco’s Form ADV brochure, which is available upon request.
No part of this material may be i) copied, photocopied or duplicated in any form, by any means, or ii) redistributed without Ayco’s prior consent.
©2022 The Ayco Company, L.P., d/b/a Goldman Sachs Ayco Personal Financial Management. All Rights Reserved. Brokerage services are offered through Goldman Sachs & Co. LLC and Mercer Allied Company, L.P. (a limited purpose broker-dealer), both affiliates of Ayco and members FINRA/SIPC.
Updated for tax year 2022