FSA money covers medical expenses your insurance doesn't fully pay for, plus some preventive items insurance won't touch at all
A Flexible Spending Account (FSA) lets you spend pre-tax dollars on may have access to medical expenses. The IRS maintains a specific list of what counts. Most common items — copays, deductibles, prescription drugs, glasses, and dental work — are covered. But FSA rules are strict: you can only use the money for expenses you incur during the plan year, and many over-the-counter products that seem medical actually aren't on the list.
The key difference between FSA-may be able to access and ineligible items often comes down to whether the product treats a medical condition or just promotes general wellness. A blood pressure monitor is covered; a general fitness tracker is not. Prescription sunscreen for a skin condition is covered; regular sunscreen is not. Understanding this line saves you from spending FSA money on items that don't count.
Key Takeaways
- FSA money covers copays, coinsurance, deductibles, and prescription medications, as well as dental, vision, and mental health care your insurance requires you to pay for.
- Over-the-counter medications like pain relievers and allergy medicine now count as FSA-may be able to access without a prescription, but only if they treat a specific medical condition you have.
- Common ineligible items include cosmetics, general vitamins, fitness equipment, and toiletries, even if they have some health benefit.
- You must use FSA money for expenses you actually incur during the plan year; leftover money is forfeited at year-end unless your plan offers a grace period or carryover option.
- Keeping receipts and documentation is essential because your FSA administrator may request proof that an expense was medically necessary.
Medical care and insurance cost-sharing you definitely can use FSA for
Copays at the doctor's office, urgent care, or emergency room are FSA-may be able to access. So are coinsurance amounts (the percentage you pay after insurance pays its share) and deductibles you haven't met yet. If your plan requires you to pay $50 to see a specialist, that $50 comes straight from your FSA.
Prescription medications are covered, whether you pick them up at a pharmacy or have them delivered. Mental health care — therapy sessions, psychiatrist visits, and counseling — counts if your insurance requires a copay or coinsurance. Dental work including cleanings, fillings, root canals, and orthodontia is FSA-may be able to access. Vision care such as eye exams, glasses, contact lenses, and lens solution all may have access to.
Medical equipment and supplies used to treat a diagnosed condition are covered: blood glucose monitors and test strips for diabetes, inhalers for asthma, blood pressure cuffs, heating pads, crutches, and braces. If a doctor prescribed it or it treats a specific medical condition you have, it almost certainly qualifies.
Over-the-counter medications and when they count
The rules for over-the-counter (OTC) medications changed in 2020. You can now use FSA money for OTC pain relievers, allergy medicine, cold medicine, antacids, and similar products without a prescription. The catch: you must be treating an actual medical condition, not just stocking a medicine cabinet for general use.
If you have diagnosed seasonal allergies and buy allergy tablets, that's FSA-may be able to access. If you buy the same allergy tablets as a precaution in case you might get allergies someday, it's not. If you have migraines and purchase pain reliever, it counts. If you buy pain reliever for a household first-aid kit, it doesn't. The IRS looks at whether the expense treats a condition you actually have.
Keep your receipt and the product packaging showing what the medication treats. If your FSA administrator questions the purchase, you'll need to show that you were treating a real medical condition, not just maintaining general health.
Items that seem medical but aren't FSA-may be able to access
Vitamins and supplements are not FSA-may be able to access unless a doctor prescribed them to treat a specific medical deficiency. A multivitamin for general wellness doesn't count. Vitamin D prescribed because you have a documented deficiency does count. The distinction hinges on whether a medical professional ordered it as treatment rather than as a preventive or wellness product.
Cosmetics and toiletries are never FSA-may be able to access, even if they're marketed as having health benefits. Sunscreen, toothpaste, deodorant, shampoo, and skincare products don't count — with one exception: prescription-strength sunscreen or medicated creams prescribed by a dermatologist to treat a skin condition are may be able to access. The product itself has to be prescribed, not just recommended.
Fitness equipment, gym memberships, and general wellness programs are ineligible. A standing desk for posture support doesn't count. A weight-loss program for general health doesn't count. However, a weight-loss program prescribed by a doctor to treat obesity-related medical conditions may be may be able to access; check with your FSA administrator first.
Cosmetic procedures and elective surgeries are not covered. Teeth whitening, Botox, and hair removal are ineligible. Reconstructive surgery following an accident or illness is usually covered; cosmetic surgery is not.
Dependent care and other non-medical FSA uses
Some employers offer a separate Dependent Care FSA (also called a Dependent Care Spending Account) alongside a medical FSA. This account is for childcare and adult dependent care expenses only — daycare, preschool, after-school programs, and in-home nannies or caregivers. You cannot use medical FSA money for dependent care, and you cannot use dependent care FSA money for medical expenses.
The two accounts have separate contribution limits and separate use-it-or-lose-it rules. If your employer offers both, you choose how much to contribute to each based on your expected expenses in each category.
The use-it-or-lose-it rule and how to avoid forfeiting money
FSA money must be used for expenses you incur during the plan year. Any balance left over at the end of the year is forfeited — you cannot roll it into the next year or cash it out. This is the biggest trap FSA owners face.
However, your employer's plan may offer a grace period (usually 2.5 months into the next year) during which you can still spend the previous year's balance on new expenses. Some plans offer a carryover of up to $610 (the limit changes yearly) into the next plan year. Check your plan documents to see which option your employer chose.
To avoid forfeiture, estimate your medical expenses conservatively. Include copays, deductibles you expect to meet, prescription medications, dental work, and vision care. If you're unsure whether you'll use the full amount, contribute less. It's better to leave some money in your paycheck than to forfeit FSA contributions you already set aside.
How to document FSA purchases and what happens if you can't
Keep receipts for all FSA purchases. Your FSA administrator may request documentation to verify that an expense was medically necessary and that you actually incurred it. A receipt showing the date, vendor, amount, and what you bought is usually sufficient.
For prescription medications and medical equipment, the receipt from the pharmacy or medical supplier is your proof. For over-the-counter items, keep the receipt and the product packaging showing what condition it treats. For medical services, keep the explanation of benefits (EOB) from your insurance or the invoice from the provider.
If you cannot produce documentation when asked, your FSA administrator may deny the reimbursement and ask you to repay the amount from your personal funds. Some administrators are lenient; others enforce documentation strictly. It's not worth the risk — file and organize receipts as you go.
Frequently Asked Questions
Can I use FSA money for my spouse's or child's medical expenses?
Yes, if they are covered under your health insurance plan. You can use your FSA to pay for copays, deductibles, and other may have access to expenses for your spouse and dependents. The expense must be incurred during the plan year and must be for a may have access to medical service.
Is prescription eyeglasses or contact lenses FSA-may be able to access?
Yes. Eyeglasses, contact lenses, lens solution, and eye exams are all FSA-may be able to access. You can use FSA money at an optometrist or ophthalmologist, or to purchase glasses and contacts from a retailer. Keep your receipt showing the date and amount.
Can I use FSA money for dental work like braces or root canals?
Yes. Dental cleanings, fillings, root canals, extractions, orthodontia (braces), and other dental procedures are FSA-may be able to access. This includes the full cost of braces or other major dental work, not just copays. Keep invoices from your dentist as documentation.
What happens if I don't use all my FSA money by the end of the year?
Unused money is forfeited unless your plan offers a grace period or carryover. A grace period typically allows you to spend the previous year's balance for 2.5 months into the new year. A carryover lets you roll up to $610 into the next plan year. Check your plan documents to see which applies to you.
Can I use FSA money for a gym membership or fitness tracker?
No. General fitness equipment and gym memberships are not FSA-may be able to access because they promote general wellness rather than treat a specific medical condition. However, a fitness program prescribed by a doctor to treat a diagnosed condition (such as obesity or heart disease) may be may be able to access — contact your FSA administrator to confirm before spending.