FSA funds cover medical and dental costs your insurance doesn't fully pay

A Flexible Spending Account (FSA) lets you set aside pre-tax money to pay for out-of-pocket healthcare expenses. The IRS maintains a specific list of what qualifies, and it's narrower than many people expect. You can use FSA funds for copays, deductibles, prescription medications, dental work, vision care, and certain medical equipment — but not for insurance premiums, over-the-counter items without a prescription, or cosmetic procedures.

The key rule: the expense must be medically necessary and not covered by your insurance plan. If your insurance pays part of the cost, you can use FSA funds for your share. If your insurance doesn't cover it at all, you can still use FSA funds if the IRS classifies it as a may have access to medical expense.

Key Takeaways

  • FSA funds pay for copays, coinsurance, deductibles, and prescription medications that your insurance requires you to pay out of pocket.
  • Dental and vision expenses may have access to, including cleanings, fillings, root canals, glasses, contact lenses, and eye exams.
  • Over-the-counter medications like pain relievers and allergy pills do not may have access to unless you have a prescription from your doctor.
  • Cosmetic procedures, gym memberships, vitamins, and insurance premiums themselves cannot be paid with FSA funds.
  • You must spend FSA money on may have access to expenses in the same calendar year it was set aside, or lose it under the "use-it-or-lose-it" rule.

Medical expenses that FSA covers

FSA funds cover the out-of-pocket portions of medical care. This includes copays when you visit a doctor, coinsurance (the percentage you pay after your deductible is met), and deductibles themselves. If your plan requires you to pay $50 to see a specialist, $100 toward your deductible, or 20 percent coinsurance on a lab test, FSA money can cover all of those.

Prescription medications are a major FSA use. Any drug your doctor prescribes and you pay for out of pocket qualifies. This includes birth control, blood pressure medication, antibiotics, and psychiatric medications. You pay with your FSA debit card or submit a receipt for reimbursement.

Medical equipment and supplies also may have access to if they treat a specific condition. Crutches, wheelchairs, blood glucose monitors, insulin, EpiPens, and hearing aids all count. Bandages, gauze, and medical tape may have access to. Orthopedic shoes designed to correct a foot problem may have access to, but regular shoes do not, even if they provide arch support.

Dental and vision care covered by FSA

Dental expenses are among the most common FSA uses. Cleanings, fillings, root canals, crowns, extractions, and orthodontia (braces) all may have access to. You can use FSA funds for the full cost of dental work or just your share if your dental insurance covers part of it. Dental X-rays and exams also may have access to.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) qualifies. Sunglasses do not, even if they have a prescription, because they are considered cosmetic.

What does not may have access to for FSA spending

Over-the-counter medications without a prescription do not may have access to, even common ones like ibuprofen, acetaminophen, cold medicine, or allergy pills. This changed in 2011 and remains the rule. However, if your doctor writes a prescription for an over-the-counter medication, it then qualifies for FSA reimbursement.

Cosmetic procedures never may have access to, even if performed by a medical professional. Botox, dermal fillers, teeth whitening, and elective plastic surgery are not covered. However, if a procedure is medically necessary — such as reconstructive surgery after an accident or to correct a breathing problem — it may may have access to.

Insurance premiums themselves cannot be paid with FSA funds. This includes health insurance premiums, dental insurance premiums, and vision insurance premiums. The exception is COBRA premiums (continuation coverage) and premiums for long-term care insurance, which do may have access to in limited circumstances.

Gym memberships, fitness classes, and general wellness programs do not may have access to, even if your doctor recommends exercise. Vitamins and supplements do not may have access to unless prescribed by a doctor for a specific deficiency. Toothpaste, mouthwash, and other hygiene products do not may have access to.

How to know if something qualifies

The IRS publishes a list of may have access to medical expenses in Publication 502. Your FSA plan administrator (usually your employer's benefits department or a third-party administrator) can also tell you whether a specific expense qualifies before you spend the money. Many FSA debit cards come with a customer service number you can call to ask about a particular item.

When in doubt, ask for a written answer from your plan administrator. Keep receipts for all FSA purchases. If you use your FSA debit card and the merchant codes the transaction as non-medical, your plan may deny it and ask you to prove it was a may have access to expense. A receipt showing what you bought makes that proof easier.

Some expenses fall into gray areas. For example, certain medical alert devices, air purifiers prescribed for asthma, and specialized mattresses for back problems may or may not may have access to depending on your plan and the specific circumstances. Your plan administrator can clarify these edge cases.

The use-it-or-lose-it deadline

FSA funds must be spent on may have access to expenses in the same calendar year they were set aside. Money you don't spend by December 31 is forfeited — your employer keeps it. Some plans offer a grace period (usually 2.5 months into the next year) or a carryover of up to $610 (the 2024 limit), but these are optional and not all plans include them.

This is why many people set aside a conservative amount in their FSA. If you overestimate and don't spend the money, you lose it. If you underestimate, you pay those expenses with after-tax dollars. Your plan documents will tell you whether your specific plan offers a grace period or carryover.

Frequently Asked Questions

Can I use FSA funds for my spouse or children?

Yes, if they are covered under your health insurance plan. You can use FSA funds for their copays, prescriptions, dental work, and other may have access to expenses. If they are not on your insurance, you cannot use your FSA for their care.

Does FSA cover mental health or therapy?

Yes. Copays for therapy sessions, psychiatrist visits, and counseling may have access to. Prescription psychiatric medications also may have access to. Your out-of-pocket costs for mental health treatment are FSA-may be able to access expenses.

Can I use FSA for a massage or acupuncture?

Only if your doctor prescribes it as treatment for a specific medical condition and documents that it is medically necessary. A general wellness massage does not may have access to. Acupuncture for pain management may may have access to if prescribed by your doctor.

What happens if I buy something with my FSA debit card and it turns out not to may have access to?

Your plan administrator may ask you to repay the amount or deny the transaction. Keep your receipt. If you can show the expense was may have access to, you can dispute the denial. If it truly was not may have access to, you may owe the money back to your FSA.

Can I use FSA funds for medical travel or hotel stays?

No. Travel and lodging are not may have access to expenses, even if you travel for medical treatment. You can use FSA funds for the medical care itself (copays, procedures, medications) but not for getting there or where you stay.