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Qualified medical expenses

A qualified medical expensequalified medical expense A type of healthcare cost that counts as eligible for specific plans or accounts. (QME) generally includes costs for:

  • Diagnosis, cure, mitigation, treatment, or prevention of disease
  • Care affecting any part or function of the body
  • Services from licensed medical practitioners
  • Medical equipment, supplies, and diagnostic devices
  • Insurance premiumspremium The monthly amount paid to maintain health insurance coverage, regardless of whether any services are used that month. for medical care coverage
  • Transportation for medical care
  • Qualified long-term care services and insurance

Expenses need to be primarily for medical care, not general health maintenance (such as vitamins, gym membership, or cosmetic procedures).

QMEs can be paid for or reimbursed through using your Thatch balance.

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You only have a Thatch balance to spend if your employer enables this functionality and your monthly premiumspremium The monthly amount paid to maintain health insurance coverage, regardless of whether any services are used that month. cost less than your allowanceallowance The amount an employer makes available to help employees pay for coverage or eligible expenses..

Eligibility​

Qualified medical expensesqualified medical expense A type of healthcare cost that counts as eligible for specific plans or accounts. are defined by IRS guidelines. The specific benefits that are covered can differ by plan. Be sure to check with your employer or benefits administrator about:

  • Whether you can spend your balance on non-premiumpremium The monthly amount paid to maintain health insurance coverage, regardless of whether any services are used that month. expenses (some plans only cover premiumspremium The monthly amount paid to maintain health insurance coverage, regardless of whether any services are used that month.)
  • Any annual limits or restrictions on how your balance can be used

If eligible, you use your Thatch balance to cover QMEs for:

  • Yourself
  • Your spouse, including expenses paid for while married, and treatments received before marriage if paid for after marriage
  • Your dependents, qualifying children under 19 (or 24 if a full-time student), qualifying relatives you support, adopted children, and children of divorced parents (special rules apply)
HSA-eligible plans and QME

If your health plan is HSA-eligible and you plan to contribute to a Health Savings AccountHealth Savings Account A tax-advantaged savings account for individuals enrolled in a high-deductible health plan (HDHP). The employee own the funds, funds roll over year to year, and funds can be used for qualified medical expense. (HSA), spending on QMEs is disabled in your Thatch account. IRS rules don't allow you to contribute to an HSA and use your Thatch balance to pay for QMEs at the same time — it's considered "double-dipping."

Receipt requirements​

To help you follow IRS guidelines, Thatch requires an itemized receipt for every purchase from your Thatch balance, whether it's for premiumspremium The monthly amount paid to maintain health insurance coverage, regardless of whether any services are used that month. or other medical expenses. Purchases and services must also happen while you have active medical coverage with Thatch.

Your itemized receipt must include:

  • Date of service or purchase
  • Provider or merchant name
  • Detailed description of service or item
  • Amount charged for each item
  • Total amount paid

A credit card statement or non-itemized receipt isn't sufficient documentation. Keep all itemized receipts for your records and potential verification requirements.

Keep your records!
  • Save all receipts for QME purchases
  • Keep copies of prescriptions or doctor recommendations
  • Document the medical necessity of items when required

Letter of Medical Necessity (LMN)​

Sometimes you might need items or services that aren't qualified expenses on their own. An LMN is your doctor's explanation of why a certain item or service is an important part of your medical care. Examples include:

  • Alternative treatments
  • Special equipment
  • Health-related home modifications
  • Weight loss programs, but only if prescribed as a treatment for a specific disease diagnosed by a physician (like obesity, hypertension, or heart disease)

In these situations, you'll need to provide an LMN:

  • Written by a qualified medical professional (like your doctor)
  • Identifies your specific medical condition
  • Recommends the specific expense for treating that condition