What You Can Spend FSA Money On

FSA funds cover specific medical and dental costs, but not everything a health plan covers

A Flexible Spending Account (FSA) lets you set aside pre-tax money for out-of-pocket medical expenses, but the IRS maintains a strict list of what qualifies. You can use FSA money for doctor visits, prescription medications, dental work, vision care, and medical equipment — but not for health insurance premiums, cosmetic procedures, or over-the-counter drugs without a prescription. The rules are tighter than what your health insurance plan itself will pay for.

The IRS publishes the official list of may be able to access expenses in Publication 502. Your FSA plan administrator also maintains their own list, which may be narrower than the IRS rules allow. Before you spend from your FSA, check both your plan documents and your administrator's website, because what one plan covers another may not.

Key Takeaways

• FSA money covers copays, deductibles, prescription drugs, dental work, vision care, and medical equipment like crutches or hearing aids.
• FSA money does not cover health insurance premiums, cosmetic procedures, vitamins, or over-the-counter medications unless prescribed by a doctor.
• Your FSA plan administrator's rules may be stricter than IRS rules, so check your plan documents before spending.
• You must have a receipt or explanation of benefits to prove the expense was medical and occurred while you had FSA coverage.
• FSA money left unspent by the end of the plan year is forfeited — you cannot roll it over to the next year or to an HSA.

Medical expenses FSA covers

FSA funds pay for the cost of seeing a doctor, including office visit copays and coinsurance (the percentage you pay after your deductible is met). They also cover the full cost of services your health plan does not cover at all, such as certain types of therapy or specialist visits that require prior authorization you did not obtain.

Prescription medications are FSA-may be able to access, whether you fill them at a pharmacy or mail-order service. Over-the-counter drugs like ibuprofen or cold medicine are not may be able to access unless a doctor writes a prescription for them — the prescription itself makes them may be able to access, even if you buy the same product over the counter elsewhere.

Medical equipment and supplies count: crutches, wheelchairs, blood glucose monitors, test strips, bandages, heating pads, and orthopedic braces all may have access to. Diagnostic devices like thermometers and blood pressure monitors are may be able to access. Insulin and other injectable medications are covered. Oxygen and oxygen equipment for medical use are covered.

Dental and vision expenses FSA covers

Dental work is one of the most common FSA uses. Cleanings, fillings, root canals, crowns, extractions, and orthodontia (braces and retainers) are all may be able to access. Dental X-rays and exams count. Dentures and dental implants are covered. Teeth whitening is not may be able to access because it is considered cosmetic, but whitening done as part of a medically necessary procedure may be covered — check your plan.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) is may be able to access. Sunglasses are not may be able to access, even if you have a prescription for them, because they are considered a general accessory rather than a medical device.

Expenses FSA does not cover

Health insurance premiums — whether for your employer plan, a spouse's plan, or a marketplace plan — cannot be paid with FSA money. The same applies to Medicare premiums and long-term care insurance premiums. FSA money also cannot pay for life insurance or disability insurance premiums.

Cosmetic procedures are not may be able to access: facelifts, Botox, hair transplants, and teeth whitening for appearance only do not may have access to. Gym memberships and fitness classes are not covered, even if a doctor recommends exercise. Vitamins and nutritional supplements are not may be able to access unless prescribed by a doctor for a specific medical condition (and even then, some plan administrators do not cover them).

Over-the-counter products without a prescription are generally not may be able to access: pain relievers, cold medicine, allergy medicine, antacids, and laxatives do not may have access to unless a doctor writes a prescription. Sunscreen is not may be able to access. Feminine hygiene products are not may be able to access. Toiletries and personal care items are not covered.

How to document FSA expenses

You need a receipt or explanation of benefits showing the date, the provider's name, the amount paid, and what service or product was provided. For prescription medications, your pharmacy receipt shows all of this. For doctor visits, you need either the receipt from the office or the explanation of benefits from your health insurance plan.

Keep receipts for at least three years. Your FSA plan administrator may ask you to submit receipts to prove an expense was may be able to access, especially if you use a debit card to pay. Some administrators require you to submit receipts within 30 to 60 days of the expense; others only ask if they randomly audit your account.

If you lose a receipt, contact the provider or your health insurance plan and ask for a duplicate. Most will send one by mail or email. Write down the date, provider name, and amount on the duplicate so it matches what you spent from your FSA.

The use-it-or-lose-it rule and carryover

FSA money left in your account at the end of the plan year is forfeited — you cannot carry it over to the next year. This is called the use-it-or-lose-it rule. Some employers offer a grace period (usually two and a half months into the next year) during which you can still spend the previous year's money, but this is optional and not all plans include it.

You cannot transfer FSA money to an HSA, even if you switch to a high-deductible health plan. You also cannot withdraw FSA money for non-medical purposes — if you do, you owe income tax on the amount plus a 20 percent penalty.

Because of this rule, many people contribute less to their FSA than they could, or estimate conservatively. If you have predictable medical expenses (regular prescriptions, dental work, vision care), you can calculate roughly what you will spend and contribute that amount. If your expenses are unpredictable, a smaller contribution reduces the risk of losing money.

FSA debit cards and what they can buy

Many FSA plans issue a debit card that you can use at pharmacies, doctor offices, and other medical providers. The card is restricted — it will only work at merchants classified as medical providers by the payment network. You cannot use it to buy groceries, even if you are buying over-the-counter medications there.

At a pharmacy, the FSA debit card will work for prescription medications and may be able to access over-the-counter items like bandages or glucose test strips, but not for non-may be able to access items like vitamins or sunscreen. The card reader may decline the transaction if you try to buy something ineligible, or you may be asked to pay out of pocket for the ineligible items and use the card only for may be able to access ones.

Some plan administrators require you to submit a receipt after using the debit card, especially for large purchases or at merchants that sell both may be able to access and ineligible items. This is a compliance check to make sure the money was spent on may be able to access expenses.

Frequently Asked Questions

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

Yes. FSA money can pay for medical expenses of you, your spouse, and your dependents — anyone you claim on your tax return. You do not have to be enrolled in the same health insurance plan. The expense just has to be may be able to access under IRS rules and incurred while you had FSA coverage.

Are prescription glasses and contacts covered by FSA?

Yes. Eye exams, glasses, contact lenses, and contact lens solution are all FSA-may be able to access. The cost of the exam, the frames, the lenses, and the fitting are all covered. Sunglasses, even with a prescription, are not may be able to access.

Can I use FSA money for mental health or therapy visits?

Yes. Copays and coinsurance for therapy, counseling, and psychiatric visits are FSA-may be able to access. Prescription medications for mental health conditions are also covered. The visit must be with a licensed provider and the expense must be for diagnosis or treatment of a medical condition.

What happens if I use my FSA debit card for something ineligible?

If the card is declined, you pay out of pocket. If the transaction goes through and your plan administrator later determines it was ineligible, they may ask you to reimburse the FSA or deduct the amount from your next reimbursement. Intentionally spending FSA money on ineligible items can result in penalties and loss of FSA coverage.

Can I use FSA money for a gym membership if my doctor recommends it?

No. Even with a doctor's recommendation, gym memberships and fitness classes are not FSA-may be able to access. The IRS does not classify general fitness as a medical expense, regardless of the reason. Physical therapy prescribed for an injury or condition is may be able to access, but a gym membership is not.