What Can I Buy With FSA?

Understanding how to maximize your Flexible Spending Account (FSA) is vital to ensuring you get the most out of this tax-advantaged financial tool. FSAs are pre-tax accounts you can use to pay for out-of-pocket health expenses. Knowing what qualifies for FSA spending can help you make informed decisions about healthcare expenses. Let's dive deeper into the wide array of items and services that your FSA can cover, providing you with a comprehensive guide on what you can buy with FSA funds.

Basics of FSA

Before we explore the specifics, it's important to understand some fundamental aspects of FSAs:

• Pre-tax Savings: FSAs allow you to contribute a portion of your salary before taxes are applied. This reduces your taxable income.
• Annual Limits: The IRS sets annual contribution limits, so keep an eye on these to ensure you don’t exceed the cap.
• Use-it-or-Lose-it Rule: FSA funds typically must be used within the plan year, though some employers offer a grace period or allow a carryover of a limited amount.

Eligible Medical Purchases

Prescription Medications

Your FSA can be used to cover costs associated with prescribed medications. This includes:

• Antibiotics and antivirals: Any medication prescribed to treat infection or inflammation.
• Chronic condition medications: Drugs prescribed for ongoing conditions such as diabetes, high blood pressure, or asthma.
• Birth control: Prescription contraceptives are eligible expenses.

Over-The-Counter (OTC) Products

Following updates from the CARES Act, many OTC medications now qualify for FSA usage without a prescription. These include:

• Pain relievers: Products such as ibuprofen and aspirin.
• Cold and flu treatments: OTC medications to reduce symptoms of colds or the flu.
• Allergy medications: Non-prescription drugs that help manage allergy symptoms.

Non-Medication Health Items

FSAs can also be spent on various health-related products that don't fall under traditional medications:

• First-aid kits: Comprehensive kits that help treat basic injuries.
• Bandages and gauze: Various types and sizes for wound care.
• Thermometers: Instruments to monitor body temperature.
• Blood pressure monitors: Devices used to regularly check blood pressure.

Eligible Health Services

Your FSA isn't limited to purchasing products; it can also cover a range of health services:

Medical Procedures

• Doctor visits: Co-pays and possibly some out-of-pocket doctor fees.
• Hospital services: Certain costs associated with hospital stays.
• Surgical procedures: Expenses for surgery and associated aftercare.

Therapy and Counseling

FSAs cover various mental health services, including:

• Psychiatric services: Sessions with licensed professionals.
• Substance abuse treatment: Programs and therapies aimed at overcoming addiction.
• Counseling services: Therapy aimed at addressing mental health issues.

Rehabilitation and Therapy

• Physical therapy: Treatment aimed at helping recover from injury or surgery.
• Occupational therapy: Aid in improving daily living skills.
• Speech therapy: Services to help improve or restore speech capabilities.

Vision and Dental Expenses

Eye Care

Your FSA funds may be allocated for a variety of eye care needs:

• Eyeglasses and contact lenses: These essentials are typically covered.
• Eye exams: Regular examinations to assess eye health.
• Corrective surgery: Procedures like LASIK may qualify when medically necessary.

Dental Care

You can also use FSA funds for many dental services, which might include:

• Routine check-ups: Regular dental visits for cleanings and exams.
• Orthodontics: Braces and related treatments.
• Restorative work: Fillings, crowns, and other types of dental repair.

Maternity and Family Planning

Expenses related to maternity and family planning are often significant. FSAs can help cover:

• Prenatal visits: Routine check-ups during pregnancy.
• Labor and delivery costs: Hospital fees associated with childbirth.
• Breast pumps and accessories: Necessary equipment for breastfeeding.
• Fertility treatments: Certain fertility procedures and prescriptions.

Dependent Care FSA

Different from the traditional healthcare FSA, a dependent care FSA helps cover:

• Daycare services: Payments for daycare for children under the age of 13.
• Adult care services: Expenses related to care for dependent adults, such as elderly parents.

Miscellaneous Eligible Expenses

Besides the standard categories of FSA-eligible expenses, several miscellaneous items are also covered:

Disability Aids

• Wheelchairs and walkers: Assistive devices for mobility.
• Hearing aids and batteries: Devices needed for individuals with hearing impairment.

Specialized Treatments

• Acupuncture: Often covered when performed by a licensed practitioner.
• Chiropractic care: Sessions aimed at resolving musculoskeletal issues.

Common Misconceptions: What FSAs Do Not Cover

While FSAs are versatile, they have limitations. It's vital to understand what's typically not eligible:

• Cosmetic procedures: Non-medically necessary surgeries or enhancements.
• Vitamins and supplements: Unless prescribed by a healthcare professional.
• Health club memberships: General fitness expenses without a medical basis.
• Teeth whitening: Aesthetic dental treatments.

Frequently Asked Questions

Can I Pay Insurance Premiums with FSA?

No, FSAs do not cover insurance premiums. They are designed to cover out-of-pocket medical expenses only.

Can I Use FSA Funds to Pay Co-pays on Existing Loans?

FSAs will cover the cost of co-pays for medical services. However, they can't be used to pay off loans or bills unrelated to current medical services.

Are FSA Funds Transferable Between Employers?

FSAs are tied to your employment, and if you switch jobs, the funds may not transfer.

What Happens to Unused FSA Funds?

Typically, any unused funds revert to the employer. Some plans offer a grace period or carryover option, so check with your specific provider for details.

Conclusion and Next Steps

Optimizing your FSA can significantly reduce your healthcare expenses by leveraging pre-tax dollars to pay for eligible healthcare products and services. By understanding what you can buy with your FSA, you can take more control over your healthcare budget.

To ensure you use your FSA to its full potential, regularly review your current medical expenses, anticipate upcoming needs, and consult with your employer's FSA administrator for any specific questions or clarifications. Exploring these opportunities will better position you to make the most of your available resources and plan effectively for your healthcare needs.

For further reading and updates on FSA-eligible expenses, consider checking reputable resources like IRS publications or trusted healthcare financial advisors.