In Announcement 2011-14 ("Announcement") the IRS concludes that breast pumps and supplies that assist lactation are medical care under §213(d) of the Internal Revenue Code ("Code"). This Announcement goes against previous guidance in which the IRS stated that breast pumps and lactation supplies did not qualify as deductible medical expenses because breast milk did not have enough health benefits to constitute medical or preventative care. The recent Announcement reverses the IRS's position on the basis that breast pumps and lactation supplies are analogous to obstetric care and therefore qualify as deductible medical expenses because they are for the purpose of affecting a structure or function of the body.
After this Announcement, if the other requirements for the deduction of medical expenses are met under Code §213(a), expenses paid for breast pumps and supplies that assist lactation are deductible medical expenses. As a result, these items will qualify for tax-free reimbursement from a health flexible spending arrangement or health reimbursement arrangement, or for a tax-free distribution from a health savings account or Archer medical savings account.
Plan sponsors and administrators should take note of this Announcement and allow breast pumps and lactation supplies to qualify for reimbursement under health flexible spending arrangements and health reimbursement arrangements offered to their employees.