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

A Flexible Spending Account (FSA) lets you set aside pre-tax money from your paycheck to pay for out-of-pocket healthcare expenses. The IRS maintains a specific list of what counts as a covered expense, and it's narrower than many people think. You can use FSA money for copays, coinsurance, deductibles, and certain medical supplies — but not for insurance premiums, over-the-counter medications without a prescription, or cosmetic procedures.

The key rule: the expense must be medically necessary, diagnosed or prescribed by a doctor, and not reimbursed by your insurance. If your insurance already paid for it or covers it fully, your FSA cannot pay again. If you use FSA funds for something not on the IRS list, you'll owe taxes on that money plus a 20 percent penalty.

Key Takeaways

  • FSA money covers copays, coinsurance, deductibles, and prescription medications, but not insurance premiums or most over-the-counter drugs.
  • Dental and vision expenses — including cleanings, fillings, glasses, and contact lenses — are FSA-may be able to access if they are not fully covered by insurance.
  • Medical equipment like crutches, wheelchairs, and blood glucose monitors counts, but only if prescribed by a doctor.
  • Expenses must be for you, your spouse, or your tax-dependent children; you cannot use FSA funds for adult children or other family members.
  • Receipts and proof of medical necessity are required; your employer or FSA administrator can audit your claims at any time.

Prescription medications and medical supplies you can pay for

Prescription drugs are always FSA-may be able to access, regardless of what they treat. This includes birth control pills, insulin, blood pressure medication, and psychiatric medications. You pay with your FSA debit card at the pharmacy, or you submit a receipt for reimbursement after you pay out of pocket.

Over-the-counter medications are FSA-may be able to access only if you have a prescription from your doctor. Aspirin, allergy medicine, cold medicine, and antacids do not count unless a doctor writes a prescription for them — and many doctors will not. The prescription must specify the medication by name; a general note saying "take over-the-counter pain relief" does not work.

Medical supplies and equipment are covered if a doctor prescribes them. This includes blood glucose monitors and test strips, lancets, syringes, bandages for wounds, compression stockings, crutches, wheelchairs, walkers, and hearing aids. Eyeglasses and contact lenses count as medical devices, not cosmetic items, so frames and lenses are FSA-may be able to access.

Dental and vision care covered by FSA funds

Dental work is FSA-may be able to access when it treats a medical condition or maintains oral health. Cleanings, fillings, root canals, crowns, and extractions all count. Orthodontia — braces and retainers — is also covered. Cosmetic dentistry, such as teeth whitening or veneers done purely for appearance, is not.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) is FSA-may be able to access. Sunglasses, even prescription sunglasses, are not covered because they are considered cosmetic or convenience items rather than medical treatment.

Copays, deductibles, and coinsurance you can cover

Any copay you owe at a doctor's office, urgent care, or hospital is FSA-may be able to access. If your plan requires a $30 copay per visit, you can use FSA funds to pay it. Coinsurance — the percentage of a bill you pay after insurance pays its share — is also covered. If your insurance covers 80 percent of a procedure and you owe 20 percent, that 20 percent is FSA-may be able to access.

Deductibles count as well. If your health insurance plan has a $1,500 deductible and you pay $500 toward it before insurance kicks in, that $500 is FSA-may be able to access. Once you meet your deductible, any remaining coinsurance is still covered by FSA funds.

Expenses that do not may have access to for FSA funds

Insurance premiums — what you pay monthly for health, dental, or vision coverage — cannot be paid with FSA funds. This includes premiums for your employer plan, a spouse's plan, or a plan you buy on your own. The only exception is COBRA continuation coverage, which can be paid with FSA funds in some cases.

Cosmetic procedures are not covered. This includes teeth whitening, Botox, dermal fillers, hair removal, and cosmetic surgery. If a procedure is medically necessary — for example, reconstructive surgery after an injury — it may be covered, but purely elective cosmetic work is not.

Gym memberships, weight loss programs, and general wellness items are not FSA-may be able to access, even if your doctor recommends exercise or weight loss. Vitamins and supplements are not covered unless prescribed by a doctor for a specific medical condition. Sunscreen, toothpaste, and soap are not covered because they are general hygiene products, not medical treatment.

Who the expenses must be for

You can use FSA funds to pay for medical expenses for yourself, your spouse, and your tax-dependent children. Tax-dependent means you claim them as a dependent on your federal tax return. The child's age does not matter — a dependent adult child counts, but an adult child you do not claim as a dependent does not.

You cannot use FSA funds for parents, siblings, or other relatives, even if you help pay for their medical care. You also cannot use FSA funds for a domestic partner unless you are legally married or your employer's plan specifically allows it.

How to document and submit FSA claims

Keep receipts for all FSA expenses. Your employer or FSA administrator can ask you to prove that an expense was medically necessary and that you actually paid for it. If you cannot provide a receipt, the claim may be denied and you will owe taxes plus a penalty on that money.

Some expenses require additional documentation. If you claim a medical device or over-the-counter medication, your FSA administrator may ask for a letter from your doctor stating that the item was medically necessary. Keep prescriptions and any written medical justification for at least three years.

If you use an FSA debit card, the card may be declined at certain merchants — for example, at a grocery store pharmacy that sells both FSA-may be able to access and ineligible items. In those cases, you will need to pay out of pocket and submit a receipt for reimbursement. The reimbursement process usually takes one to two weeks.

Frequently Asked Questions

Can I use FSA money for my spouse's medical expenses?

Yes, if you are legally married. You can use your FSA to pay for your spouse's copays, deductibles, prescriptions, and dental work. You cannot use it for a domestic partner unless your employer's plan specifically allows it or you are legally married.

Is my birth control covered by FSA?

Yes. All prescription birth control methods — pills, patches, rings, implants, and IUDs — are FSA-may be able to access. Over-the-counter methods like condoms are not covered. If your insurance covers birth control fully, you cannot use FSA funds to pay for it again.

Can I use FSA for mental health or therapy?

Yes. Copays and coinsurance for therapy, counseling, and psychiatric care are FSA-may be able to access. Prescription psychiatric medications are also covered. If your insurance requires a deductible before mental health coverage begins, that deductible is FSA-may be able to access.

What happens if I submit a claim for something not on the IRS list?

If your claim is denied, you will be notified and asked to repay the FSA. If you already spent the money, you will owe taxes on it plus a 20 percent penalty. Your FSA administrator should tell you whether an expense is covered before you submit the claim if you are unsure.

Are hearing aids and hearing aid batteries FSA-may be able to access?

Yes. Hearing aids, batteries, repairs, and maintenance are all FSA-may be able to access because they are prescribed medical devices. Copays for hearing tests are also covered.