What you can buy with FSA funds

FSA money can only be spent on may have access to medical expenses — costs that treat, manage, or prevent a medical condition and are not covered by your health insurance. The IRS publishes a list of what counts. Common may be able to access purchases include copays, deductibles, prescription medications, glasses, dental work, and hearing aids. Less obvious ones include crutches, bandages, blood pressure monitors, and pregnancy tests.

You cannot use FSA funds for cosmetic procedures, vitamins (unless prescribed by a doctor for a specific condition), gym memberships, or over-the-counter medications like cold medicine or pain relievers — though insulin is an exception and is always covered, even over-the-counter. The rules are strict because FSA contributions come from pre-tax dollars, so the IRS limits what qualifies to prevent people from using the account as a general savings tool.

Your FSA plan documents and your plan administrator's website usually list may be able to access items specific to your plan. Some employers add restrictions beyond what the IRS allows, so checking your plan summary is the safest first step before you spend.

Key Takeaways

  • FSA funds cover medical expenses your insurance does not pay for, including copays, deductibles, prescription drugs, dental care, and vision care.
  • You cannot use FSA money for cosmetic procedures, most over-the-counter medications, or general wellness items like gym memberships.
  • Your specific plan may restrict may be able to access items further than the IRS does, so review your plan documents before spending.
  • Most FSA cards work like debit cards at pharmacies and medical offices, but some require you to pay out of pocket and submit a receipt for reimbursement.
  • Receipts and proof of the expense must be kept in case your plan administrator asks you to verify that the purchase was may be able to access.

How to pay with your FSA card

Most FSA plans issue a debit card that you can use at pharmacies, doctor's offices, and medical supply stores. Swipe or insert it like a regular debit card, and the cost comes directly from your FSA balance. The merchant's system usually recognizes it as a medical card, so the transaction goes through without you having to prove the expense is may be able to access.

Some merchants — particularly smaller practices or independent pharmacies — may not recognize the FSA card and will decline it. If that happens, pay with a personal card or cash, keep the receipt, and submit it to your plan administrator for reimbursement. The reimbursement process usually takes one to two weeks after you submit the receipt and a claim form (often available online through your plan's website or app).

A few plans do not issue cards at all and require you to pay out of pocket for everything, then submit receipts to get reimbursed. Check whether your plan sent you a card or gave you instructions for submitting claims by mail or online portal.

Submitting receipts for reimbursement

If you paid for an may be able to access expense with your own money, you can ask your plan administrator to reimburse you from your FSA. You will need the receipt showing the date, the provider or merchant name, the amount paid, and what was purchased. A credit card statement alone is not enough — you need the itemized receipt that shows the specific medical service or product.

Most plans let you submit receipts through an online portal or mobile app. You photograph the receipt, upload it, and the plan processes it within one to three weeks. Some older plans still accept paper claims by mail; your plan documents will say which method applies to you.

Keep receipts for at least three years. The IRS can audit FSA spending, and your plan administrator may ask you to prove that an expense was may be able to access. If you cannot produce the receipt, you may have to repay the reimbursement from your pre-tax funds, which means paying taxes on it retroactively.

Dependent care FSA versus medical FSA

Some employers offer a separate dependent care FSA alongside the medical FSA. This account pays for childcare, after-school programs, and adult day care for elderly relatives — but only if the care allows you or your spouse to work. You cannot use dependent care FSA funds for medical expenses, and you cannot use medical FSA funds for childcare.

Dependent care FSA has a lower annual limit (usually $5,000 per household per year, though some employers set it lower) and different tax rules. If you have both accounts, keep track of which expense goes to which account, because mixing them up can trigger an audit or require you to repay funds.

What happens to unused FSA money

FSA accounts operate under a use-it-or-lose-it rule. Money you do not spend by the end of the plan year (usually December 31) is forfeited and goes back to your employer. There is no carryover to the next year, with rare exceptions.

Some plans offer a grace period of up to 2.5 months into the next calendar year to spend the previous year's money. A few plans allow you to carry over up to $610 (the amount changes yearly) into the next year, but this is uncommon and only available if your employer chooses to offer it. Check your plan documents to see whether either option applies to you.

Because of this rule, many people estimate conservatively when choosing their FSA contribution amount at open enrollment. If you know you will have unused money, you can spend it on over-the-counter items that are may be able to access (like bandages or heating pads) or on dental or vision care you have been postponing.

Coordination with insurance and other accounts

FSA funds are meant to cover costs your health insurance does not pay. If your insurance covers a service fully, you cannot use FSA money for it — that would be double-dipping. However, if your insurance covers part of a cost and leaves a copay or coinsurance, you can use FSA funds for the patient's share.

You can also coordinate FSA spending with a Health Savings Account (HSA) if you have both. HSA money can be used for the same may be able to access medical expenses as FSA, and there is no use-it-or-lose-it rule with HSA. Some people use their FSA first (to avoid losing the money) and save their HSA for future years. Others do the reverse. The choice depends on your health spending patterns and how much you have in each account.

Common mistakes to avoid

The most common error is buying something you think is medical but the IRS does not cover — like multivitamins, sunscreen, or teeth whitening. Before you buy, check the IRS Publication 502 (Medical and Dental Expenses) or ask your plan administrator whether the specific item is may be able to access. A few seconds of checking saves you from losing money.

Another mistake is not keeping receipts. Even if your FSA card was accepted at the time of purchase, your plan administrator can audit the transaction months later and ask for proof. Without a receipt, you cannot prove the expense was may be able to access and may have to repay it.

A third mistake is spending FSA money on someone else's medical care and not realizing it. You can use FSA funds for your spouse's and your children's medical expenses, but not for an adult child over 26 (unless they are still your dependent for tax purposes) or for a parent or sibling. Check the IRS rules about who counts as a dependent before you pay.

Frequently Asked Questions

Can I use my FSA card at any pharmacy or doctor's office?

Most major pharmacies and medical offices accept FSA cards, but not all. Independent pharmacies, small dental practices, and some specialists may not have the system set up to recognize FSA cards. If a merchant declines your card, pay out of pocket and submit the receipt to your plan administrator for reimbursement.

What if I spend my FSA money and then my insurance changes?

Once you spend FSA money, it is gone — you cannot get it back even if your coverage changes. This is why it is important to estimate conservatively at open enrollment. If you experience a major life change (job loss, marriage, birth of a child), you may be able to change your FSA contribution mid-year, but you cannot recover money already spent.

Can I use FSA funds for my pet's medical care?

No. FSA funds cover only medical expenses for you, your spouse, and your tax-dependent children. Veterinary care is not covered, even if the pet is a service animal. Service animals' food and training also do not may have access to.

Do I have to report FSA spending to the IRS?

No. Your employer and plan administrator handle the tax reporting. You do not file anything with the IRS about FSA spending. However, keep your receipts in case the IRS audits your employer's FSA plan, which can happen randomly.

What if my FSA card is lost or stolen?

Contact your plan administrator immediately to report it. They will cancel the card and issue a replacement, usually within one to two weeks. In the meantime, you can submit receipts for reimbursement if you pay out of pocket. Fraudulent charges on a lost FSA card are typically the plan's responsibility, not yours.