FSA funds cover medical and dental costs that your insurance doesn't, but the list is tightly defined by federal tax law

A Flexible Spending Account (FSA) lets you set aside pre-tax money for out-of-pocket healthcare expenses. The IRS publishes a specific list of what counts as a may have access to medical expense — and it is narrower than many people expect. You can use FSA money for copays, deductibles, prescription drugs, and certain medical equipment. You cannot use it for cosmetic procedures, most over-the-counter items without a prescription, or health insurance premiums (with rare exceptions). The rules are the same whether you have a general FSA or a dependent care FSA — each type covers only its own category of expenses.

The key to staying compliant is understanding that the IRS, not your employer or your insurance company, decides what qualifies. A purchase that your health plan covers may still be ineligible for FSA funds, and vice versa. When in doubt, ask your FSA plan administrator in writing before you spend the money — most plans have a phone line or online tool for this purpose.

Key Takeaways

  • FSA funds cover copays, coinsurance, deductibles, prescription medications, and medical equipment like crutches or glucose monitors, but only if your insurance plan requires you to pay out of pocket.
  • Over-the-counter items such as pain relievers, cold medicine, and antacids require a prescription from your doctor to be FSA-may be able to access, even if you can buy them without one at a pharmacy.
  • Cosmetic procedures, gym memberships, vitamins, and most dental work beyond basic cleaning and X-rays are not covered, though some dental and vision expenses do may have access to under specific conditions.
  • Dependent care FSAs cover daycare, after-school programs, and summer camps for children under 13, but not overnight camps or tuition at schools that provide childcare as part of their program.
  • You must keep receipts and documentation for every purchase; the IRS can audit your account, and using FSA money for ineligible expenses may result in taxes owed plus penalties.

Medical expenses that FSA money covers

FSA funds can pay for any out-of-pocket medical cost that your health insurance plan requires you to pay. This includes copays when you visit a doctor, coinsurance (your share of the cost after insurance pays its portion), and deductibles (the amount you must pay before insurance kicks in). Prescription medications are always covered. So are medical devices and supplies your doctor prescribes: insulin, test strips for blood glucose monitoring, EpiPens, inhalers, crutches, wheelchairs, hearing aids, and prescription eyeglasses or contact lenses.

Dental and vision care have their own rules. FSA money covers dental cleanings, X-rays, fillings, and root canals. It does not cover cosmetic dental work like teeth whitening or veneers. Vision expenses that may have access to include eye exams, prescription glasses, contact lenses, and laser eye surgery (LASIK). Orthodontia — braces and retainers — is covered if your plan includes it.

Mental health and therapy services are covered if your insurance plan covers them and you are paying out of pocket. The same applies to physical therapy, occupational therapy, and speech therapy. If your doctor prescribes a medical device — a back brace, knee support, or compression stocking — FSA money can pay for it. Durable medical equipment like oxygen tanks, wheelchairs, and walkers also qualifies.

Over-the-counter items and the prescription rule

This is where FSA rules trip up most people. You cannot use FSA money for over-the-counter pain relievers, cold medicine, allergy medication, antacids, or cough syrup — even if you buy them at a pharmacy — unless your doctor writes you a prescription for that specific item. A prescription for "ibuprofen 200 mg" makes it FSA-may be able to access. Buying ibuprofen off the shelf at a drugstore does not, even if it is the same dose and same brand.

The exception is insulin. Over-the-counter insulin is FSA-may be able to access without a prescription. For everything else, you need a written prescription from your doctor. Some people ask their doctor to write a prescription for common items they know they will need; this is legal and makes the purchase FSA-may be able to access. Keep the prescription with your receipt in case your FSA plan administrator asks for proof.

Vitamins, supplements, and herbal products are not covered unless your doctor prescribes them to treat a specific medical condition. A multivitamin for general health does not may have access to. A prescription for vitamin D to treat a deficiency does. The difference is whether the product is meant to prevent illness or treat one.

What FSA money cannot cover

Cosmetic procedures are never covered, even if they are performed by a medical professional. This includes teeth whitening, Botox, dermal fillers, hair removal, and cosmetic surgery. The rule is: if the procedure is done to improve appearance rather than treat a medical condition, FSA money cannot pay for it. Reconstructive surgery after an injury or illness does may have access to.

Health insurance premiums are generally not FSA-may be able to access. The exception is COBRA continuation coverage (the temporary health insurance you can buy if you lose your job) — you can use FSA money to pay COBRA premiums. You also cannot use FSA funds to pay for long-term care insurance or disability insurance. Medicare premiums are not covered either, though some limited exceptions exist for certain retirees.

Gym memberships, fitness classes, and weight loss programs are not covered, even if your doctor recommends exercise. Nutritional counseling is covered only if your doctor prescribes it to treat a specific medical condition like diabetes or heart disease. General wellness programs and health coaching are not covered. Childcare FSA money has its own exclusions: it covers daycare centers, in-home daycare providers, and after-school programs for children under 13. It does not cover overnight camps, tuition at schools that provide childcare as part of their program (like private school with before- and after-care included), or babysitting for date nights or social events.

How to know if something is FSA-may be able to access

The IRS maintains Publication 502, which lists may have access to medical expenses in detail and is available on the IRS website. Your FSA plan administrator also publishes a list of covered items specific to your plan — check your plan documents or call the customer service number on your FSA card. When you are unsure about a specific purchase, ask your FSA administrator before you buy it. Many plans have online tools or a phone line where you can submit a question and get a written answer within a few business days.

Keep all receipts and documentation. If you use your FSA debit card, the transaction may be flagged for review if the merchant category suggests it might not be medical (for example, a pharmacy that also sells cosmetics or a general retailer). You may need to submit a receipt or a letter from your doctor explaining why the expense is medically necessary. The IRS can audit FSA accounts, and if you cannot document that a purchase was may be able to access, you may owe taxes on that amount plus penalties. Store receipts for at least three to five years.

Dependent care FSA coverage and limits

A dependent care FSA covers the cost of childcare so you can work. This includes daycare centers, family daycare homes, and in-home nannies or babysitters. It also covers after-school programs, summer day camps, and preschool for children under 13. The child must be your dependent, and you must incur the expense so that you (and your spouse, if married) can work or look for work. Some plans also cover adult day care for elderly or disabled dependents.

Overnight camps, tuition at schools that include childcare in their program, and babysitting for social events or date nights do not may have access to. If your child attends a private school that includes before- and after-school care as part of tuition, you cannot use dependent care FSA money for any portion of that tuition. However, if you pay a separate fee to an outside provider for after-school care, that fee is may be able to access.

There is an annual limit on how much you can contribute to a dependent care FSA — currently $5,000 per household per year, though this amount can change. Check your plan documents for the current limit and any employer match. Unlike a general FSA, dependent care FSA funds do not roll over to the next year, so plan your contributions carefully.

Documentation and what happens if you use FSA money incorrectly

Your FSA plan administrator may ask you to submit receipts or a letter of medical necessity for any purchase. Keep documentation for at least three to five years. If you cannot prove that an expense was may be able to access, you may have to repay the FSA out of pocket, and you will owe income tax on that amount. If the IRS determines that you knowingly used FSA funds for ineligible expenses, you may face additional penalties and interest.

Some FSA plans use a "substantiation" process where the administrator randomly audits purchases or flags certain merchant categories for review. If your purchase is flagged, you will receive a letter asking you to provide proof that the expense was medically necessary. Respond promptly with your receipt and any supporting documentation from your doctor. If you do not respond or cannot provide proof, the plan may deny the claim and require you to repay the amount.

Frequently Asked Questions

Can I use FSA money for my health insurance deductible?

Yes. FSA funds can pay for any out-of-pocket cost your insurance plan requires you to pay, including your deductible. Once you meet your deductible, you can continue using FSA money for copays and coinsurance.

Is sunscreen FSA-may be able to access?

No. Sunscreen is considered a cosmetic or general wellness product and is not covered. However, if your dermatologist prescribes a medical-grade sunscreen to treat a specific skin condition, it may be may be able to access — ask your FSA administrator and keep the prescription with your receipt.

Can I use my dependent care FSA for my child's school tuition?

Only if the tuition is for a program whose primary purpose is childcare, not education. If your child attends a private school that includes childcare as an add-on service, you cannot use dependent care FSA funds for any part of tuition. You can use it for standalone after-school programs or summer day camps.

What if I buy something with my FSA card and it turns out to be ineligible?

Contact your FSA administrator immediately. Some plans allow you to dispute the transaction or request a reversal. If the purchase is deemed ineligible, you may need to repay the amount out of pocket and will owe income tax on it. Keep your receipt so you can prove what you bought if asked.

Are prescription glasses and contacts covered by FSA?

Yes. FSA money covers the cost of prescription eyeglasses, contact lenses, and eye exams. It also covers LASIK and other corrective eye surgery. Non-prescription sunglasses are not covered, but prescription sunglasses are.