What a Flexible Spending Account Covers

A Flexible Spending Account (FSA) lets you set aside pre-tax money from your paycheck to pay for medical expenses your health insurance doesn't cover or covers only partially. The IRS publishes a list of what counts as an may be able to access medical expense, and it's narrower than most people think. You can use FSA money for copays, deductibles, prescription drugs, and certain medical equipment. You cannot use it for health insurance premiums, cosmetic procedures, or most over-the-counter items without a prescription.

The catch is that FSA money must be spent in the same calendar year you set it aside—there's no rollover to next year, with rare exceptions. This "use-it-or-lose-it" rule means you need to estimate your medical spending carefully before you commit money to the account.

Key Takeaways

  • FSA money covers copays, coinsurance, deductibles, and prescription medications that your insurance requires you to pay out of pocket.
  • Over-the-counter drugs like cold medicine and pain relievers are not may be able to access unless your doctor writes a prescription for them.
  • Medical equipment such as crutches, wheelchairs, and blood glucose monitors is may be able to access, but cosmetic procedures and teeth whitening are not.
  • Money you don't spend by December 31 is forfeited, so you should only contribute what you reasonably expect to use in that year.

Prescription Medications and Copays

Prescription drugs are one of the most common FSA expenses. Any medication your doctor prescribes and a pharmacy fills is may be able to access, whether it treats a chronic condition or a short-term illness. This includes birth control pills, inhalers, antibiotics, and psychiatric medications. You pay with your FSA debit card or submit a receipt for reimbursement after you pay out of pocket.

Copays and coinsurance—the fixed amount or percentage you owe when you visit a doctor, specialist, or urgent care—are also may be able to access. If your plan requires you to pay $40 per doctor visit or 20 percent of a lab test, FSA money covers both. Deductibles count too: if you haven't met your annual deductible yet, you can use FSA funds to pay toward it.

Medical Equipment and Supplies

The IRS considers many medical devices and supplies may be able to access for FSA reimbursement. Crutches, canes, wheelchairs, walkers, and orthopedic braces all may have access to. Blood glucose monitors and test strips for diabetes management are may be able to access. Hearing aids, prescription eyeglasses, and contact lenses (including the solution) are covered. Bandages, gauze, and other wound-care supplies purchased on a doctor's orders are may be able to access.

Some items require a prescription or a letter from your doctor stating medical necessity. For example, a heating pad might be may be able to access if your doctor prescribes it for a specific condition, but a general heating pad you buy for comfort is not. When in doubt, ask your FSA plan administrator or your doctor before you buy.

What Over-the-Counter Items Require

Over-the-counter medications—cold medicine, allergy pills, pain relievers, antacids, and laxatives—are not may be able to access for FSA reimbursement unless your doctor writes a prescription for them. This rule changed in 2011 and catches many people off guard. If you want to use FSA money for ibuprofen or antihistamines, you need a written prescription from your doctor, even though you can buy the same product without one at any pharmacy.

Over-the-counter medical supplies like thermometers, blood pressure monitors, and pregnancy tests are may be able to access without a prescription. The difference is that supplies measure or detect a condition, while medications treat it. If you're unsure whether a specific item counts as a supply or a medication, contact your FSA administrator before you buy.

Dental and Vision Expenses

Dental work covered by your health insurance plan is may be able to access for FSA reimbursement. This includes cleanings, fillings, root canals, and extractions. Orthodontia (braces) is may be able to access if your insurance covers it. However, cosmetic dental work—teeth whitening, veneers, or bonding done purely for appearance—is not may be able to access, even if your insurance would pay for it.

Vision expenses include eye exams, prescription glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) is may be able to access. Sunglasses are not, even if they have a prescription in them, because they serve a non-medical purpose. If you wear prescription sunglasses for a medical reason (such as light sensitivity from an eye condition), ask your FSA administrator whether your specific pair qualifies.

Mental Health and Therapy Services

Copays and coinsurance for therapy, counseling, and psychiatric visits are may be able to access FSA expenses. This includes sessions with a therapist, psychologist, psychiatrist, or counselor if your health insurance covers the visit. If your insurance requires you to pay a copay or coinsurance for mental health care, FSA money covers it.

Some employers offer Employee Assistance Programs (EAPs) that provide free or low-cost counseling sessions. If your EAP charges a copay, that copay is FSA-may be able to access. However, therapy or counseling that your insurance does not cover is not may be able to access, because FSA money can only reimburse expenses that would otherwise be your responsibility under your health plan.

What Is Not may be able to access

Health insurance premiums themselves—what you pay for your monthly or annual coverage—cannot be paid with FSA money. Cosmetic procedures like Botox, facelifts, and hair removal are not may be able to access. Gym memberships and fitness classes are not may be able to access, even if your doctor recommends exercise. Vitamins and supplements are not may be able to access unless your doctor prescribes them for a specific medical condition and writes a prescription.

Toiletries and personal care items—toothpaste, soap, shampoo, deodorant—are not may be able to access. Maternity clothes are not may be able to access. Pet medications and veterinary care are not may be able to access. If you're paying for something that a healthy person without a medical condition might also buy, it's probably not FSA-may be able to access.

How to Know Before You Spend

Your FSA plan administrator (usually your employer's benefits department or a third-party company managing the account) can tell you whether a specific expense is may be able to access. Most FSA debit cards come with a customer service number on the back. You can also check the IRS Publication 502, which lists may be able to access medical expenses in detail, though it's written in tax language and can be hard to parse.

When you submit a receipt for reimbursement, the FSA administrator will review it and either approve or deny the claim. If they deny it, they'll tell you why. Keep your receipts for at least three years in case the IRS audits your account. If you're unsure about an expense, buy it with a personal card or cash first, then ask the FSA administrator whether it's may be able to access before you submit for reimbursement.

Frequently Asked Questions

Can I use FSA money for my spouse's or child's medical expenses?

Yes, if they are your tax dependents. You can use your FSA to pay for may be able to access medical expenses for yourself, your spouse, and any children you claim on your tax return, regardless of whether they're covered under your health insurance plan.

What happens if I don't spend all my FSA money by the end of the year?

You forfeit it—the money does not roll over to the next year. Some employers offer a grace period (usually 2.5 months into the next year) or a limited carryover of up to $610 (the amount changes yearly). Check your plan documents to see if your employer offers either option.

Do I need a receipt to use my FSA debit card?

At the pharmacy or doctor's office, no—you can swipe your FSA card like a regular debit card. For other purchases, you may need to submit a receipt later to prove the expense was medical. Keep all receipts in case your FSA administrator asks for documentation.

Can I use FSA money for my parents' medical expenses?

Only if you claim them as tax dependents on your return. If your parents are independent and file their own taxes, their medical expenses are not may be able to access for your FSA, even if you pay for them.

Are prescription eyeglasses and contacts may be able to access?

Yes. Prescription glasses, contact lenses, contact lens solution, and eye exams are all may be able to access. Sunglasses are not may be able to access unless they have a medical prescription and your doctor documents that you need them for a specific eye condition.