HSA/FSA Eligibility for Mattresses: What Mattress Brands Need to Know
Benjamin Cole
Head of Compliance
For large mattress brands, HSA and FSA acceptance represents a meaningful revenue opportunity but is also an area that demands precision when it comes to compliance. The IRS does not explicitly mention mattress eligibility in Internal Revenue Code § 213(d) or IRS Publication 502. Instead, the IRS clarifies in a Revenue Ruling that eligibility depends on whether the mattress meets the Internal Revenue Code’s definition of medical care — and whether that purpose is properly substantiated.
I’m Benny Cole, Flex’s Head of Compliance, and in this post, I’ll explain:
The IRS’s legal framework for medical expense eligibility
What Revenue Ruling 55-261 says specifically about mattresses
Flex’s position on mattresses
“Medical Care” defined by the IRS
HSA and FSA eligibility is built on Internal Revenue Code § 213(d), which defines medical care as amounts paid:
The diagnosis, cure, mitigation, treatment, or prevention of disease, or
for the purpose of affecting any part or function of the human body.
IRS regulations further clarify that an expense is medical only if its primary purpose is medical care, not general health or personal comfort.
These regulations distinguish between:
Expenses incurred primarily for medical care (eligible), and
Personal, living, or family expenses (not eligible).
This distinction is critical for mattresses. For more on eligibility, feel free to check out Flex’s blog post on HSA/FSA eligibility.
Revenue Ruling 55-261: The IRS Addressing Mattresses Directly
In Revenue Ruling 55-261, the IRS addressed whether a special mattress prescribed for arthritis qualifies as a medical expense. The IRS concluded:
“The expense of a special mattress and plywood boards prescribed for the relief of a physical disease or illness constitutes a medical deduction…”
This ruling is important for two reasons:
The IRS explicitly recognized a medically prescribed mattress as deductible medical care.
The IRS did not impose an incremental cost limitation in its mattress analysis
The IRS did not specify the mattress or plywood boards singularly as qualifying for as a medical expense but accepted the combination of both products as qualifying
Primary Purpose Matters: Incremental Cost Does Not Automatically Apply
A common misconception is that reimbursement must be limited to the incremental cost above a standard mattress. That is not always correct, what matters the most is the primary purpose for the purchase of the mattress.
When the Primary Purpose Is Medical
If a mattress is prescribed by a physician to treat a diagnosed condition — then its primary purpose for purchase is medical and IRS guidance permits reimbursement of the full cost.
Analysis of Treasury regulations Prop. Reg. § 1.125-5(k) (FSAs and the rules governing the tax favored treatment of employer-provided health benefits) and Prop. Reg. § 1.125-6(b) (Rules for claims substantiation for cafeteria plans) supports this stance as it is mentioned respectively:
Health plans that are flexible spending arrangements, as defined in paragraph (a)(1) of this section, must conform to the generally applicable rules under sections 105 and 106 in order for the coverage and reimbursements under such plans to qualify for tax-favored treatment under such sections. Thus, health FSAs must qualify as accident and health plans. See paragraph (n) in § 1.125-1. A health FSA is only permitted to reimburse medical expenses as defined in section 213(d). Thus, for example, a health FSA is not permitted to reimburse dependent care expenses.
All claims must be substantiated. As a precondition of payment or reimbursement of expenses for qualified benefits, a cafeteria plan must require substantiation in accordance with this section. Substantiating only a percentage of claims, or substantiating only claims above a certain dollar amount, fails to comply with the substantiation requirements in § 1.125-1 and this section.
Under these rules, substantiated medical expenses are fully reimbursable even if incidental personal benefit exists.
When the Item Is Dual-Use
In contrast, IRS guidance applies a “net cost” or incremental cost approach for certain dual-purpose items, most notably food.
In Rev. Rul. 55-261, the IRS limited reimbursement for special food to the amount exceeding normal consumption costs. The IRS then reaffirmed this approach in its updated 2023 FAQ:
The medical expense is limited to the amount by which the cost exceeds the cost of a product that satisfies normal nutritional needs.
Notably, the IRS did not impose this limitation on mattresses, just food. This implies that the core legal distinction is whether the product’s primary purpose is medical or whether it substitutes a normal personal expense.
Establishing Primary Purpose through a Letter of Medical Necessity (LMN)
For mattresses to be HSA/FSA eligible, it is critical that the purchase be supported by a Letter of Medical Necessity (LMN) and an itemized receipt.
This is based on Prop. Reg. § 1.125-6(b), substantiation must include:
Information describing the service or product
The date of the service or sale
The amount of the expense
Extending this to guidance to LMNs, an adequate LMN for a mattress should include the following:
A diagnosed medical condition
A physician's prescription of the mattress for the condition
An explanation of how the mattress treats or alleviates the conditions
Expected duration of use
Now, given that FSAs are Employer sponsored, Employers may impose additional plan-specific documentation requirements.
Flex’s Position on Mattresses
At Flex, we apply a regulation-driven compliance framework.
A mattress may be HSA/FSA eligible when:
A licensed healthcare provider diagnoses a condition (e.g., arthritis, degenerative disc disease, sleep apnea requiring elevation, chronic back pain tied to pathology);
The provider prescribes a specific mattress with identified medical features;
The LMN explains how the mattress mitigates or treats the condition;
The primary purpose is medical — not general wellness.
Incremental Cost Treatment
We do not default to the incremental cost framework as both the Physicians we work with, and the LMNs they provide are intended to demonstrate primary medical purpose and therefore should qualify in full. This is fully supported by IRS regulation.
Risk Mitigation
Flex ensures:
Clear eligibility criteria
Documentation requirements at checkout
Marketing guardrails aligned with IRS language
Audit-ready substantiation standards
Our approach aligns with IRS regulation while enabling compliant revenue growth for merchants and empowering people to get the medical care they need through use of their tax advantage accounts.
At Flex, we also understand that FSAs are Employer sponsored so there may be FSAs that do not take the same stance that we do. This is why we always encourage customers to check with their FSA provider before making any purchase just to ensure a smooth substantiation process.
A Compliance-Forward Growth Channel
The IRS has already acknowledged that a prescribed mattress can qualify as medical care. The governing standard is clear: primary medical purpose, properly substantiated.
For large mattress brands, this represents a significant and defensible ecommerce growth channel — provided it is structured correctly.
Flex partners with enterprise merchants to operationalize HSA/FSA acceptance in a manner that aligns with:
IRC § 213(d)
Treasury Regulations
Revenue Ruling 55-261
Current IRS interpretive guidance
Compliance is not a constraint — it is the foundation for sustainable growth!
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