FSA money covers medical expenses your insurance doesn't fully pay for, plus some costs insurance won't cover at all

A Flexible Spending Account (FSA) lets you pay for may be able to access medical, dental, and vision expenses with pre-tax dollars. That means you set aside money before taxes are taken out, reducing your taxable income for the year. You can use that money to pay for deductibles, copays, coinsurance, and certain products and services that your health insurance plan doesn't cover.

The IRS maintains a specific list of what counts as an may be able to access medical expense. The list is longer than most people expect — it includes prescription medications, over-the-counter drugs (with a prescription), dental work, glasses, hearing aids, and even some items you might not think of as medical. But not everything health-related qualifies. Cosmetic procedures, gym memberships, and general wellness products typically do not.

The key is understanding the difference between what your insurance covers and what the IRS considers a legitimate medical expense. Those are two separate questions, and an FSA can help with both.

Key Takeaways

  • FSA funds cover copays, deductibles, and coinsurance for any service your insurance plan covers, whether or not insurance pays the full amount.
  • You can use FSA money for prescription medications, over-the-counter drugs (if prescribed by a doctor), dental care, vision care, and medical equipment like crutches or blood pressure monitors.
  • Cosmetic procedures, gym memberships, vitamins without a medical condition diagnosis, and weight-loss programs are not FSA-may be able to access, even if you pay out of pocket.
  • FSA funds must be spent by the end of the plan year or you lose them, so tracking what you spend throughout the year matters.

Prescription and Over-the-Counter Medications

Prescription medications are always FSA-may be able to access. You can use your FSA debit card at the pharmacy, or pay out of pocket and submit a receipt for reimbursement. This includes brand-name drugs, generics, and specialty medications.

Over-the-counter medications — like ibuprofen, allergy pills, cold medicine, or antacids — became FSA-may be able to access again in 2020, but only if a doctor prescribes them. You cannot simply buy them off the shelf. Your doctor must write a prescription or provide a written statement that you need the medication for a specific condition. Some pharmacies will accept a verbal prescription for OTC drugs; others require it in writing. Ask your pharmacy what they need before you buy.

Vitamins and supplements are generally not FSA-may be able to access unless a doctor prescribes them to treat a diagnosed medical condition — for example, vitamin D for a deficiency or prenatal vitamins for pregnancy. A general multivitamin for wellness does not may have access to.

Dental and Vision Care

Dental expenses covered by your insurance plan are FSA-may be able to access, including cleanings, fillings, root canals, and orthodontia. You can also use FSA funds for dental work your insurance does not cover — like cosmetic bonding or whitening — as long as the procedure has a medical purpose. If it is purely cosmetic, it does not may have access to.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) is FSA-may be able to access. Sunglasses are not, even if they have a prescription, because they are considered a general accessory rather than a medical device.

Dental and vision expenses often have their own deductibles and coverage limits under your insurance plan. An FSA can cover what your plan does not, or cover the full cost if you have not met your deductible yet.

Medical Equipment and Supplies

Medical equipment and supplies are FSA-may be able to access if they treat or monitor a medical condition. This includes blood pressure monitors, glucose meters and test strips, thermometers, crutches, wheelchairs, hearing aids and batteries, orthopedic braces, and compression stockings. Bandages, gauze, and first-aid supplies also may have access to.

Devices that improve general health or comfort — like a heating pad, massage chair, or air purifier — are typically not FSA-may be able to access unless a doctor prescribes them to treat a specific condition. A heating pad prescribed for chronic back pain may may have access to; a heating pad you buy for general comfort does not.

If you are unsure whether a piece of equipment qualifies, ask your FSA plan administrator before you buy. Some items sit in a gray area, and the answer can depend on whether a doctor prescribed it and what condition it treats.

Mental Health and Therapy Services

Therapy, counseling, and psychiatric care are FSA-may be able to access. This includes sessions with a therapist, psychologist, or psychiatrist, whether in person or telehealth. You can use FSA funds to cover your copay or coinsurance, or pay the full cost if you see an out-of-network provider.

Substance abuse treatment and rehabilitation programs are also FSA-may be able to access. This includes inpatient rehab, outpatient programs, and support group memberships if they are part of a treatment plan.

Mental health services are often subject to the same deductibles and copays as other medical care under your insurance plan. An FSA can cover those out-of-pocket costs.

Expenses That Do Not may have access to

Cosmetic procedures — like Botox, facelifts, teeth whitening for appearance only, or hair removal — are not FSA-may be able to access. The exception is if the procedure corrects a medical condition or injury. Reconstructive surgery after an accident or birth defect may may have access to; elective cosmetic surgery does not.

Gym memberships, fitness classes, and general wellness programs do not may have access to, even if your doctor recommends exercise. Weight-loss programs and diet plans are not FSA-may be able to access unless they are part of a medically supervised treatment for obesity or a related condition.

Toiletries and personal care items — like toothpaste, soap, shampoo, and deodorant — are not FSA-may be able to access, even though they relate to health. Sunscreen is not FSA-may be able to access. Feminine hygiene products became FSA-may be able to access in 2020, so pads and tampons now may have access to.

Travel and lodging for medical treatment are generally not FSA-may be able to access, even if you travel for a procedure. The exception is lodging during inpatient treatment at a hospital or rehabilitation facility.

How to Track and Use Your FSA Balance

Most FSA plans issue a debit card that you can use at pharmacies, doctors' offices, and other providers. When you swipe the card, the transaction is checked against the IRS list of may be able to access expenses. If the merchant code does not match an may be able to access category, the card may be declined, even if you are buying something that qualifies.

Keep all receipts. If a transaction is denied or flagged, you may need to submit a receipt and a letter from your doctor explaining the medical purpose. Your FSA plan administrator can request this documentation at any time to verify that expenses were may be able to access.

You can also pay out of pocket and submit receipts for reimbursement. This is sometimes necessary for expenses that do not fit standard merchant categories — like a prescription from an online pharmacy or a medical device from a non-traditional retailer. Your plan administrator will review the receipt and reimburse you if it qualifies.

Track your spending throughout the year. FSA funds operate on a "use it or lose it" basis — money you do not spend by the end of the plan year is forfeited. Some plans offer a grace period (usually 2.5 months into the next year) or a carryover of up to $610 (the amount changes yearly), but most do not. Knowing your balance and what you have left to spend helps you avoid losing money.

Frequently Asked Questions

Can I use my FSA for my spouse or children?

Yes. FSA funds can cover may be able to access medical expenses for you, your spouse, and any dependent children under age 26, even if they are not on your health insurance plan. You can use the money for their prescriptions, dental work, vision care, and other may be able to access expenses.

What happens if I buy something and later find out it is not FSA-may be able to access?

If you used your FSA debit card and the transaction went through, you may be able to request a refund from your plan administrator if you can show the item was ineligible. If you paid out of pocket and submitted a receipt, the plan will deny reimbursement. Keep receipts so you know what you spent and can plan accordingly.

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

No. FSA funds are only for human medical expenses. Veterinary care and pet medications do not may have access to, even if your pet is a service animal. Service animals' food and equipment also do not may have access to.

Are acupuncture and chiropractic care FSA-may be able to access?

Yes, if your health insurance plan covers them. If your plan does not cover these services, they are not FSA-may be able to access either. Check your plan documents or call your insurance company to confirm coverage before you use FSA funds.

Can I use FSA money for a medical procedure my insurance denies?

It depends. If your insurance denies the procedure because it is not medically necessary, the FSA will also consider it ineligible. If your insurance denies it for other reasons — like because you have not met your deductible or because the provider is out of network — you can still use FSA funds to pay for it, as long as the procedure itself is an may be able to access medical expense.