HSA/FSA
A Guide for Brands: Which Skincare Products Are HSA/FSA Eligible?
Brands and consumers should review which skincare products are always, or sometimes, eligible for HSA/FSA funds to help shoppers maximize their tax-free savings.
October 16, 2025
Sam O'Keefe
Co-founder & CEO of Flex
Overview
Overview
Overview
Want to help your shoppers save money on your products without offering a discount? Then it’s time to tap into the market for Health Savings Account (HSA) and Flexible Spending Account (FSA) spending for your eligible products.
Skincare shoppers can use their HSA and FSA dollars to cover products like sunscreen and cleansers. That means you can help customers maximize their benefits while boosting sales.
Using their FSAs and HSAs – which together represent nearly $150 billion in untapped assets – shoppers can tap into pre-tax dollars they’ve already set aside to pay for products that are considered eligible medical expenses.
An estimated 35 million people working in the U.S. have FSA accounts funded by their employers, and fewer than half of accounts allow funds to roll over indefinitely – which means account holders are eager to identify ways to use their benefits each year before they lose access.
The HSA market, which is linked to high-deductible health plans, is even larger, with more than 61 million Americans using such accounts. HSA funds don’t expire, and account balances tend to grow with age: For HSA accountholders between 45-54, the average balance is over $5,000.
By understanding which skincare products qualify for HSA/FSA accounts, and ensuring those products are clearly labeled, your brand can support your shoppers’ healthcare needs while helping them save money.
How Do Skincare Brands Qualify for HSA/FSA Funds?
To qualify for HSA/FSA funds, you’ll need to ensure that your products are compliant with IRS guidelines for eligibility.
In their words, “medical expenses” include “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.” This can include “legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners” and “the costs of equipment, supplies, and diagnostic devices.”
Some skincare products – such as sunscreen or rash treatments – are always eligible, while others will be deemed eligible with a doctor’s note. Products that serve dual purposes (both cosmetic and medical) may also fall within the guidelines, if you take the right steps to ensure authorization. Product types that are solely cosmetic will not meet the criteria.
By clearly outlining which products do and don’t qualify for HSA/FSA funds, and empowering shoppers to pay with those accounts directly at checkout, you’ll be able to build trust while also removing barriers to purchase. The combination of transparency and payment acceptance helps customers stretch their pre-tax dollars further on skincare essentials, while giving your brand a new lever to drive loyalty and growth.
Let’s walk through the categorization process for skincare products – with tips on how to ensure HSA/FSA eligibility for as many products as possible.
Always Eligible
Some product types clearly meet IRS criteria, because they’re always used to treat or prevent a medical condition. They can be purchased with HSA/FSA cards at checkout – no additional paperwork required.
Common active ingredients include Salicylic Acid, Hyaluronic Acid, Vitamin C, Benzoyl Peroxide, Petroleum/Petrolatum, Hydrocortisone, Ceramides, Glycerin, Shea Butter, Colloidal Oatmeal, and Retinol. Products that include SPF of 15+ are also eligible.
The following skincare-related product types are always eligible:
Facial products (cleansers, toners, exfoliants, pads, moisturizers, creams) medicated to treat skin conditions such as acne, eczema, rosacea, blemishes
Sunscreen and sun protection products with at least SPF +15
Lip balms with SPF+ 15 or
Skin protective ointments e.g. Aquaphor or Vaseline
Examples:
Online skincare hub Dermstore includes a filter for HSA/FSA-eligible products, including those that are always eligible as a subcategory. With Flex, shoppers can check out seamlessly using their HSA or FSA dollars at the point of purchase, no extra steps or reimbursements required. Some of the auto-eligible products include:
EltaMD UV Clear Broad-Spectrum SPF 46 (Sunscreen)
First Aid Beauty Clearing Daily Acne Pads
Paula's Choice SKIN PERFECTING 2 BHA Liquid Exfolian
Japanese skincare and cosmetics brand Sheisido has a HSA/FSA guide on their site, linking to all of their auto-eligible products. Every beauty product that contains SPF 15+ qualifies for automatic eligibility, regardless of whether it’s primarily intended as a sunscreen. These products include:
Vital Perfection Uplifting and Firming Advanced Day Cream SPF 30
Urban Environment Oil-Free Sunscreen SPF 42 (facial sunscreen)
Benefiance Wrinkle Smoothing Day Cream SPF 23 (moisturizer)
Dual Purpose (Eligible with LMN)
Some products aren’t quite as cut-and-dried – consider eye creams, serums, and moisturizers, to name a few examples. They may be used cosmetically, but can also provide medical support for underlying skin conditions.
For these dual-purpose products, it’s important to set up a process for obtaining medical authorization. Consumers may be eligible for HSA/FSA coverage with a Letter of Medical Necessity (LMN) from a healthcare provider, which qualifies their medical condition and recommends the product as a valid treatment.
To meet eligibility criteria, these products must not be purely cosmetic – this rules out makeup like foundation, primers, lipstick, eyeshadow, and eyeliner, and other traditional make up products. Products that contain active ingredients to treat skin conditions like acne, eczema, rosacea, psoriasis, dermatitis, and dry skin should be eligible, as long as a medical provider confirms that you have one of these conditions.
While shoppers can get their own doctor’s approval for a product to declare it eligible, this process is time-consuming, adds friction to the checkout process, and may cost more than the savings they’ll get by qualifying the product. Instead, take advantage of Flex’s telehealth prompts right in the checkout flow, so that shoppers can instantly receive their eligibility letter for free, and seamlessly complete the checkout process.
Example:
Dermstore includes a filter for HSA/FSA-eligible products that require a letter of medical necessity. To qualify for eligibility, shoppers simply complete a short telehealth questionnaire which is reviewed by a doctor, who can provide them with a Letter of Medical Necessity. Customers can check out using their HSA or FSA debit card, or submit the receipt for reimbursement later. Dual-purpose products available on the shop include:
SkinCeuticals C E Ferulic (Vitamin C serum)
Neocutis LUMIÈRE FIRM Illuminating & Tightening Eye Cream (Eye cream)
SkinCeuticals Micro-Exfoliating Scrub (Exfoliating scrub/Cleanser)
Not Eligible
Traditionally cosmetic-only products (eyeliner, foundation, mascara, lipstick, etc.) cannot be purchased with HSA/FSA dollars. If you’re looking to use up your HSA/FSA dollars, focus on the first two categories to avoid potential issues with the IRS.
Example:
Shiseido separates high-protection sunscreens (eligible) from beauty-first lines like tinted powders (not eligible).
Using HSA/FSA Funds for Red Light Therapy
Beyond traditional OTC or prescription-based skincare products, many red light therapy products are also eligible for HSA/FSA funds.
Red light therapy uses low-wavelength red light to promote healing, reduce inflammation, and improve skin and cellular function. It’s sometimes called low-level laser therapy (LLLT) or photobiomodulation. Products that incorporate red light therapy include handheld wands and pens, face masks, belts, sauna blankets, and mats, among others.
Certain red light therapy devices that are marketed specifically to treat acne and other medical conditions are automatically approved for purchase with HSA/FSA funds. However, some red light therapy devices are marketed as anti-aging products, and they’re not considered HSA/FSA eligible for this use case. That said, if the device includes other benefits, such as acne treatment, pain relief, or wound treatment, the device is likely to be approved for use of the funds with a letter of medical necessity.
By clearly outlining which products are always eligible, and which ones are eligible with a doctor’s letter, you’ll be able to guide your shoppers in the right direction to make the best use of their HSA/FSA funds.
Example:
Currentbody segments its light therapy products, based on products that are always eligible for HSA/FSA funds and those that require a letter of medical necessity (which can be obtained on the spot via the Flex platform).
Increase Revenue with HSA/FSA
Highlighting your eligible products as HSA/FSA-approved removes friction at checkout by clearly communicating IRS compliance, helping shoppers buy with confidence while driving a 50% lift in average order value and a 30% increase in conversions. By ensuring that they can easily obtain an LMN if required, you’ll be able to qualify more of your products for maximum savings, increasing purchase rates and boosting customer loyalty.
Merchants like Dermstore, Shiseido, and Currentbody are leading the way by spotlighting HSA/FSA eligibility in their product descriptions and promotions and making it easy for shoppers to use their pre-tax dollars effectively. Brands that deliver clarity and ease around meeting HSA/FSA guidelines will win customer loyalty for the long run.
👉 If you’re a skincare brand looking to accept HSA/FSA payments, contact us here.
Want to help your shoppers save money on your products without offering a discount? Then it’s time to tap into the market for Health Savings Account (HSA) and Flexible Spending Account (FSA) spending for your eligible products.
Skincare shoppers can use their HSA and FSA dollars to cover products like sunscreen and cleansers. That means you can help customers maximize their benefits while boosting sales.
Using their FSAs and HSAs – which together represent nearly $150 billion in untapped assets – shoppers can tap into pre-tax dollars they’ve already set aside to pay for products that are considered eligible medical expenses.
An estimated 35 million people working in the U.S. have FSA accounts funded by their employers, and fewer than half of accounts allow funds to roll over indefinitely – which means account holders are eager to identify ways to use their benefits each year before they lose access.
The HSA market, which is linked to high-deductible health plans, is even larger, with more than 61 million Americans using such accounts. HSA funds don’t expire, and account balances tend to grow with age: For HSA accountholders between 45-54, the average balance is over $5,000.
By understanding which skincare products qualify for HSA/FSA accounts, and ensuring those products are clearly labeled, your brand can support your shoppers’ healthcare needs while helping them save money.
How Do Skincare Brands Qualify for HSA/FSA Funds?
To qualify for HSA/FSA funds, you’ll need to ensure that your products are compliant with IRS guidelines for eligibility.
In their words, “medical expenses” include “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.” This can include “legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners” and “the costs of equipment, supplies, and diagnostic devices.”
Some skincare products – such as sunscreen or rash treatments – are always eligible, while others will be deemed eligible with a doctor’s note. Products that serve dual purposes (both cosmetic and medical) may also fall within the guidelines, if you take the right steps to ensure authorization. Product types that are solely cosmetic will not meet the criteria.
By clearly outlining which products do and don’t qualify for HSA/FSA funds, and empowering shoppers to pay with those accounts directly at checkout, you’ll be able to build trust while also removing barriers to purchase. The combination of transparency and payment acceptance helps customers stretch their pre-tax dollars further on skincare essentials, while giving your brand a new lever to drive loyalty and growth.
Let’s walk through the categorization process for skincare products – with tips on how to ensure HSA/FSA eligibility for as many products as possible.
Always Eligible
Some product types clearly meet IRS criteria, because they’re always used to treat or prevent a medical condition. They can be purchased with HSA/FSA cards at checkout – no additional paperwork required.
Common active ingredients include Salicylic Acid, Hyaluronic Acid, Vitamin C, Benzoyl Peroxide, Petroleum/Petrolatum, Hydrocortisone, Ceramides, Glycerin, Shea Butter, Colloidal Oatmeal, and Retinol. Products that include SPF of 15+ are also eligible.
The following skincare-related product types are always eligible:
Facial products (cleansers, toners, exfoliants, pads, moisturizers, creams) medicated to treat skin conditions such as acne, eczema, rosacea, blemishes
Sunscreen and sun protection products with at least SPF +15
Lip balms with SPF+ 15 or
Skin protective ointments e.g. Aquaphor or Vaseline
Examples:
Online skincare hub Dermstore includes a filter for HSA/FSA-eligible products, including those that are always eligible as a subcategory. With Flex, shoppers can check out seamlessly using their HSA or FSA dollars at the point of purchase, no extra steps or reimbursements required. Some of the auto-eligible products include:
EltaMD UV Clear Broad-Spectrum SPF 46 (Sunscreen)
First Aid Beauty Clearing Daily Acne Pads
Paula's Choice SKIN PERFECTING 2 BHA Liquid Exfolian
Japanese skincare and cosmetics brand Sheisido has a HSA/FSA guide on their site, linking to all of their auto-eligible products. Every beauty product that contains SPF 15+ qualifies for automatic eligibility, regardless of whether it’s primarily intended as a sunscreen. These products include:
Vital Perfection Uplifting and Firming Advanced Day Cream SPF 30
Urban Environment Oil-Free Sunscreen SPF 42 (facial sunscreen)
Benefiance Wrinkle Smoothing Day Cream SPF 23 (moisturizer)
Dual Purpose (Eligible with LMN)
Some products aren’t quite as cut-and-dried – consider eye creams, serums, and moisturizers, to name a few examples. They may be used cosmetically, but can also provide medical support for underlying skin conditions.
For these dual-purpose products, it’s important to set up a process for obtaining medical authorization. Consumers may be eligible for HSA/FSA coverage with a Letter of Medical Necessity (LMN) from a healthcare provider, which qualifies their medical condition and recommends the product as a valid treatment.
To meet eligibility criteria, these products must not be purely cosmetic – this rules out makeup like foundation, primers, lipstick, eyeshadow, and eyeliner, and other traditional make up products. Products that contain active ingredients to treat skin conditions like acne, eczema, rosacea, psoriasis, dermatitis, and dry skin should be eligible, as long as a medical provider confirms that you have one of these conditions.
While shoppers can get their own doctor’s approval for a product to declare it eligible, this process is time-consuming, adds friction to the checkout process, and may cost more than the savings they’ll get by qualifying the product. Instead, take advantage of Flex’s telehealth prompts right in the checkout flow, so that shoppers can instantly receive their eligibility letter for free, and seamlessly complete the checkout process.
Example:
Dermstore includes a filter for HSA/FSA-eligible products that require a letter of medical necessity. To qualify for eligibility, shoppers simply complete a short telehealth questionnaire which is reviewed by a doctor, who can provide them with a Letter of Medical Necessity. Customers can check out using their HSA or FSA debit card, or submit the receipt for reimbursement later. Dual-purpose products available on the shop include:
SkinCeuticals C E Ferulic (Vitamin C serum)
Neocutis LUMIÈRE FIRM Illuminating & Tightening Eye Cream (Eye cream)
SkinCeuticals Micro-Exfoliating Scrub (Exfoliating scrub/Cleanser)
Not Eligible
Traditionally cosmetic-only products (eyeliner, foundation, mascara, lipstick, etc.) cannot be purchased with HSA/FSA dollars. If you’re looking to use up your HSA/FSA dollars, focus on the first two categories to avoid potential issues with the IRS.
Example:
Shiseido separates high-protection sunscreens (eligible) from beauty-first lines like tinted powders (not eligible).
Using HSA/FSA Funds for Red Light Therapy
Beyond traditional OTC or prescription-based skincare products, many red light therapy products are also eligible for HSA/FSA funds.
Red light therapy uses low-wavelength red light to promote healing, reduce inflammation, and improve skin and cellular function. It’s sometimes called low-level laser therapy (LLLT) or photobiomodulation. Products that incorporate red light therapy include handheld wands and pens, face masks, belts, sauna blankets, and mats, among others.
Certain red light therapy devices that are marketed specifically to treat acne and other medical conditions are automatically approved for purchase with HSA/FSA funds. However, some red light therapy devices are marketed as anti-aging products, and they’re not considered HSA/FSA eligible for this use case. That said, if the device includes other benefits, such as acne treatment, pain relief, or wound treatment, the device is likely to be approved for use of the funds with a letter of medical necessity.
By clearly outlining which products are always eligible, and which ones are eligible with a doctor’s letter, you’ll be able to guide your shoppers in the right direction to make the best use of their HSA/FSA funds.
Example:
Currentbody segments its light therapy products, based on products that are always eligible for HSA/FSA funds and those that require a letter of medical necessity (which can be obtained on the spot via the Flex platform).
Increase Revenue with HSA/FSA
Highlighting your eligible products as HSA/FSA-approved removes friction at checkout by clearly communicating IRS compliance, helping shoppers buy with confidence while driving a 50% lift in average order value and a 30% increase in conversions. By ensuring that they can easily obtain an LMN if required, you’ll be able to qualify more of your products for maximum savings, increasing purchase rates and boosting customer loyalty.
Merchants like Dermstore, Shiseido, and Currentbody are leading the way by spotlighting HSA/FSA eligibility in their product descriptions and promotions and making it easy for shoppers to use their pre-tax dollars effectively. Brands that deliver clarity and ease around meeting HSA/FSA guidelines will win customer loyalty for the long run.
👉 If you’re a skincare brand looking to accept HSA/FSA payments, contact us here.
Flex is the easiest way for direct to consumer brands and retailers to accept HSA/FSA for their 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.