Rev. Rul. 74-429

Advice has been requested whether amounts paid by taxpayers, under the circumstances described below, for insurance for their contact lenses are amounts paid for medical care as defined in section 213(e) of the Internal Revenue Code of 1954.

Taxpayer A was fitted with contact lenses by an optometrist. A entered into an agreement with the optometrist whereby in return for a nonrefundable fixed amount the optometrist agreed to replace A's contact lenses for one year if they became lost or damaged.

Taxpayer B was fitted with contact lenses by an ophthalmologist. B entered into an agreement with an insurance company whereby in return for a fixed amount the insurance company agreed to pay the practitioner who originally dispensed the lenses or another practitioner designated by the company if the original practitioner was not in business at the time of loss, the cost (less a deductible amount) of having B's contact lenses replaced for one year if they became lost or damaged.

The term "medical care" is defined in section 213(e)(1) of the Code as meaning amounts paid--

(A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body,

(B) for transportation primarily for and essential to medical care referred to in subparagraph (A), or

(C) for insurance * * * covering medical care referred to in subparagraphs (A) and (B).

Amounts paid by a taxpayer for contact lenses to correct his vision are payments for medical care within the meaning of section 213(e)(1)(A) of the Code. Accordingly, the amounts paid by taxpayers A and B for insurance against loss or damage to their contact lenses are amounts paid for medical care within the meaning of section 213(e)(1)(C).