Does Insurance Cover Tattoo Removal or Scar Treatment?

Why most plans do not pay for tattoo removal

If you are hoping your health plan will help with the cost, it helps to know how plans decide. Insurers generally pay for care that is medically necessary. HealthCare.gov defines that as services or supplies needed to diagnose or treat an illness, injury, condition, disease or its symptoms, and that meet accepted standards of medicine.

Removing a tattoo you chose and no longer want usually does not meet that test, so plans tend to classify it as cosmetic. Laser Eraser's FAQ says the same thing: tattoo removal is generally cosmetic and not covered by insurance. Keep in mind that the same procedure can be judged differently depending on why you need it.

Medicare's coverage manual is one public example of how this line is drawn. It excludes cosmetic surgery, meaning procedures aimed at improving appearance, except when needed for prompt repair of an accidental injury or to improve the function of a malformed body part. Private plans write their own rules, so the details of your plan documents are what count.

When scar treatment may be different

Scars sit in more of a gray zone. AAD notes that laser treatment can ease the pain and itch scars sometimes cause, and can help someone move more freely when a scar limits movement. Even so, AAD says insurers still consider laser treatments cosmetic, and health insurance generally does not cover cosmetic treatments. The American Society of Plastic Surgeons says most health plans will not cover scar revision surgery and advises reading your policy carefully.

If your scar causes real symptoms, such as pain, itching or tightness that limits how you move, ask your plan whether treatment could be considered medically necessary in your case. Many plans require approval before certain services. HealthCare.gov calls this preauthorization, also known as prior authorization, and notes that approval is not a promise the plan will cover the cost.

For questions about the treatment itself, see questions to ask before scar treatment.

How to ask your plan about coverage

If you think you have a medical reason, a short, organized call can save you time and surprise bills. Before you call, find your plan documents and look for a section on cosmetic procedures or exclusions. Have the name of the treatment ready, along with your doctor's notes about symptoms such as pain, itching or limited movement.

Write down the date, the name of the person you spoke with and any reference number. Settle the question before treatment starts, since a plan that requires approval may not pay for care that began without it. Useful questions include:

• Is this treatment covered for my diagnosis, or is it excluded as cosmetic?
• Does it need preauthorization, and who has to send the request?
• Do I need a referral, an in-network provider or a certain type of provider?
• What records do you need, such as notes on symptoms, photos or the cause of the scar?
• Can you send me the answer in writing?

HSA, FSA and IRS Publication 502

A health savings account (HSA) lets you set aside money on a pre-tax basis to pay for qualified medical expenses, and a flexible spending account (FSA) through an employer works in a similar way. IRS Publication 969 explains that HSA qualified medical expenses are amounts paid for medical care as defined in the tax code. For an FSA, they are expenses specified in the plan that would generally qualify for the medical and dental expenses deduction. Both point back to the rules the IRS explains in Publication 502.

Publication 502 says that, generally, you can't include amounts paid for cosmetic surgery. It defines that as any procedure directed at improving appearance that doesn't meaningfully promote the proper function of the body or prevent or treat illness or disease. It then gives exceptions. Cosmetic surgery can count if it is necessary to improve a deformity arising from, or directly related to:

• a congenital abnormality (a condition present from birth),
• a personal injury resulting from an accident or trauma, or
• a disfiguring disease.

What the IRS rules may mean for you

Under the general rule, removing a tattoo you chose and no longer like looks like a procedure aimed at appearance. Using HSA money for something that is not a qualified medical expense has a cost: IRS Publication 969 says those withdrawals are subject to income tax and may also face an additional tax.

The exceptions may matter if your tattoo or scar came from an injury or an illness. One example might be a traumatic tattoo, where dirt or debris was driven into the skin in an accident. Whether your situation fits an exception depends on your facts, so ask a tax adviser and your HSA or FSA administrator before you pay with those funds. FSA plans can also set their own lists of covered expenses. And an HSA can only pay for expenses that insurance or another source has not already paid, according to Publication 969.

Keep good records either way. Publication 969 says HSA owners must keep records showing that withdrawals paid for qualified medical expenses. Itemized receipts and any notes from your doctor about the cause of the scar or tattoo can help if questions come up later.

Paying for treatment without insurance

If insurance will not help, the next step is understanding the price and your payment options. At Laser Eraser, tattoo removal is priced through Complete Removal Packages by tattoo size, with one flat price covering the sessions the tattoo needs, and the exact quote is free at the consultation. The pricing page explains how the packages work.

To pay over time, the practice offers financing through Cherry, and the site says you can prequalify with a soft check and no hard credit pull. The payment plans page has the details. Before you sign any financing agreement, read the terms, and use our guide to comparing tattoo removal quotes to check what a quote and a payment plan include.